Firm Foundation Theory

Business, Legal & Accounting Glossary

Definition: Firm Foundation Theory



Full Definition of Firm Foundation Theory


The Firm Foundation Theory is one of the important Investment Theories.

It postulates that any financial asset like a stock or real estates like a piece of property has an intrinsic value. The condition in the market either keeps the price below the intrinsic value or above the intrinsic value – it rarely remains at or around the intrinsic value. This position offers the investor a choice – in case, he/she is able to buy the stock or the real estate below its intrinsic value, he/she shall make profits when the price goes above the intrinsic value.


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Definition Sources


Definitions for Firm Foundation Theory are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 3rd May, 2020 | 15 Views.