According to Investopedia.com (2015), intrinsic value refers to “[…] the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value […]”. In the specific case given for The Home Depot company, the current value as of today is $146.68 per share, while the intrinsic value based on free cash flow is $83.43. Now, the question is why: is the gap between these two values so noticeable? There are a few reasons for this situation. The stock price is driven by forces that fall into three categories: fundamental factors, technical factors, and market sentiment (Harper,
