Justified and intrinsic: what does these two exactly refer to? Thanks.
I think the intrinsic value is the MV or stock price value that you determine based on your DCF analysis (as opposed to the actual market price). A justified P/E ratio is a ratio that uses the intrinsic value for P.
The justified value is the value derived based on the fundamentals of the stock (growth rate, ROE, etc.). The intrinsic value is also a value derived based on fundamentals, however intrinsic value may be different for different investors (based on each one’s assumptions). If the market is inefficient the market value may be different from intrinsic value (i.e. overvalued or undervalues) and the investor hopes that the market price of the stock will be equal to intrinsic value when the inefficiency ends.