PDSnet Glossary

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Definition

Fully priced is when the potential of a share to produce future dividends is fully discounted into its price. This means that there is no opportunity for investors to make money by buying the share at current levels. Often investors as a group misunderstand the potential of a company to produce profits and its shares trade at a significant discount to their true value. This affords investors an opportunity to buy the share and then realise a capital gain when the market recognises its mistake and bids the share up to a more reasonable price. A share which is fully priced offers no such opportunity.

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