Question

What are the three elements that affect the corporate’s value?

Answer 1

The three elements that affect the corporate's value is :

• The supply and demand: the stock prices changes constantly and the single most important factor affecting the stock prices is the demand and supply . The buyers and sellers often bid for stocks in the secondary market. The price at which the buyer buys the stock is the bid price and the lowest price at which the seller sell is the ask price. When the number of buyers is more than the number of sellers then the stock prices will rise.
• The financial performance of a company : A company who reports consistent good financial performance and tends to beat the estimates even during times of an economic downturn. Such a company becomes valuable to the investors.
• The macroeconomic factors affecting the economy as a whole: Every stock is affecting by the microeconomic events which is the specific events affecting the stock and the macroeconomic events which is the inflation, interest rates affecting the stocks of a company.

As demand exceeds the supply , stock prices shoot up , when supply exceeds demand them the prices of stock begin to fall.