MUTUAL FUND ASSOCIATION OF TRINIDAD AND TOBAGO
"STRENGTHENING THE ENVIRONMENT FOR INVESTOR CONFIDENCE"

 

Equity Valuations

Before investing, it is important to understand the value of a stock and whether it is worth your investment. The stock’s value is the price that you are willing to pay for part ownership of a company. Equity valuation is a methodology which is utilised for deriving the fair value of a firm or its equity stock. If the estimated value:

  • exceeds the market price, the analyst infers the security is undervalued.
  • equals the market price, the analyst infers the security is fairly valued.
  • is less than the market price, the analyst infers the security is overvalued

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