How does the chapter define the intrinsic value of a stock and its relationship to the stock's current price?

The intrinsic value of a stock is defined as its true long-run value, which is related to the stock's price over time. A firm's goal should be to maximize this intrinsic value, as it reflects the stock's worth based on the company's performance and market conditions.

Intrinsic value represents the underlying worth of a stock based on the company's fundamentals and long-term prospects. The relationship between intrinsic value and the stock's current price is crucial; ideally, the current price should reflect this intrinsic value. When a firm successfully maximizes its intrinsic value, it contributes positively to shareholder wealth and overall market performance.