1. #1
    Unregistered

    How does stock prices matter to the running of company?

    Somehow I am still not able to understand about stock prices factor with company what I mean is the company finds huge profit if the stocks are good and bad if the other way but how does it matters? What is the relationship between the stock and companies?

  2. #2
    Ashok Array
    Join Date
    Jul 2012
    Posts
    2,293

    Re: How does stock prices matter to the running of company?

    [QUOTE=Unregistered;87859]Somehow I am still not able to understand about stock prices factor with company what I mean is the company finds huge profit if the stocks are good and bad if the other way but how does it matters? What is the relationship between the stock and companies?[/QUOTE]

    Dear Aspirant,

    You can understand the the relation between stocks & companies with the following example.Imagine the things happen in the market.Suppose you run a well established company which is very popular in terms of product or services.Thus there are so many purchaser of your company stock.It means the price of the stock will go up & you will get more & more fund.In the reverse side,if there are many sellers of your company stocks,it means you will have to pay more & more.In this situation the price of the stock will come down.

    We can say that the stocks of the company is directly propotionate to the financial position of the company.

    Thanks.

    Ashok

  3. #3
    snicker Array
    Join Date
    Aug 2012
    Posts
    32

    Re: How does stock prices matter to the running of company?

    Each and every company will issue shares to the public to raise money.

    These shares will trade on the stock exchange at a certain market value.

    If the share price of the company is going high, that means that the company business is good.

    A result in share price will mean that the company business is not good.

    People will invest in these shares based on this market value only.

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