Stock values are determined by _________________.
A) The net worth of a business divided by shares outstanding
B) Calculating the price/earnings ratio
C) The past performance of the company
D) What investors are willing to pay for the stock

Question

Quizplus · Accepted Answer

Stock values are determined by what investors are willing to pay for the stock. This is referred to as the market price. Factors that can influence investor demand for a stock include the company's financial performance, market trends, and investor sentiment. While a company's past performance may be a factor in investor decision-making, it is ultimately the market's collective demand for the stock that determines its value. The other options provided, such as net worth divided by shares outstanding and price/earnings ratio, can be used as tools to analyze a company's financial health, but they do not directly determine the stock's value on the market.

Stock Values Are Determined by _________________