Intrinsic Value Undervalued Overvalued


Something I am unclear on is how to know what is over and undervalued.

In an equity related question if a If a s tock’s intrinsic value is greater than its market value, the stock is undervalued.

However I got this wrong in the question as I had just finished portfolio mangement where, after computing CAPM, if the intrinsic value return is greater than expected return then it is over valued.

I guess these are different concepts entirely and I got confused?

The CAPM is for calculating required return,. The Jensen’s Alpha formular does it for me, If the Rp - [Rf+ B(Rm-Rf)]. Is positive,it is undervalued, if negative, overvalued.