Definition for : Fundamental valuation method
GLOSSARY LETTER
The fundamental valuation method determines the company's Intrinsic value - share, in accordance with financial theory, by Discounting Cash flows to their Present value using the Required rate of return. Two basic methods are used: the Dividend discount model and the discounted Cash flow model.
(See Chapter 32 Capital structure and the theory of perfect capital markets of the Vernimmen)
To know more about it, look at what we have already written on this subject