What determines the stock value?

Expert Solution

Basically the stock value is determined through the various factors as mentioned below :

Stock value is a term related to a company's equity securities also know as common stocks, the value of the stock is determined through the demand and supply in the market. The stock value oftenly increases and decrease due to the transactions between the buyer and seller of the shares.

Please find the below formula for calculating the Stock value or stock price :

To find EPS Earning per share , EPS = net profit / no of equity shares

It is compulsory that the net profit should be of 12 months.

Price-to-earnings ratio = stock price / earnings per share

To get stock price we need to adjust the formula logically.

Stock price = EPS / Price to earning ratio

You can get P.E ratio from company's financials statements reports.

Now ,with all the figures , simply divide the Earning per share number with P/E ratio and you will get the company's current stock Value.

jeff jeffy answered 2 months ago

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