Share Price Flashcards
What is a share price?
The cost to purchase an individual share, determined by the supply of and demand for an organisation’s shares.
How is a share price determined?
Basically it’s supply and demand, but below are factors to why the price would change.
Previous financial performance
Predicted financial performance
Dividend payments (makes it attractive to shareholders)
Perceived managerial competence
The state of the economy
Political stability (creates certainty - brexit for example)
Investor confidence
What does the price of a share changing indicate?
An indication of belief about future performance
Determines risk of takeover for a company (if prices are low that could be a risk)
Determines confidence in a company - I.E supplier - credit, ect
Impact of pensions/ investments - macroeconomic effect
