Saturday, January 14, 2012
What determines share price? is it the same as dividends?
Share price is simply a result of supply and demand. The company only issues a certain number of shares (supply). The popularity (demand) of those shares are what determines the price. As for dividends, they are separate from the share price. So you are correct to think that your profit would be change in share price (increase or decrease) + dividends. However, the dividends are not directly reflected in the market price of the shares (although a high dividend can increase the demand for that share, therefore increasing the price per share).
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