Security Valuation

Security valuation is the process of determining the worth of a financial asset like a stock or bond. It involves analyzing factors such as a company’s financial health, future growth potential, and market conditions to estimate its fair value. This helps investors decide whether a security is overvalued, undervalued, or fairly priced, guiding investment decisions. Techniques like discounted cash flow analysis and comparing it to similar assets are common methods. Overall, security valuation provides a reasoned estimate of an asset’s value to make informed investment choices.