What determines the value of a stock?
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Our response:
Many factors can cause the price of a stock to rise or fall – correctly determining how a stock price will change is extremely difficult, even for market experts. There are some general factors that can affect stock prices, including:
- Company news and performance – for example, earnings and profits reports, dividend announcements, anticipated mergers, etc.
- Industry performance – for example, general market conditions or the performance of a major competitor.
- Investor sentiment – for example, confidence in the markets, and whether the market is currently weak (bear market) or strong (bull market).
- Economic factors – for example, interest rates, inflation, changes in economic policy, change in the value of the Canadian dollar, etc.
- Financial Position – for example, the financial position of the company, the status of its business operations, and its ability to maintain a listing for its shares in a public market will also affect the price established in the marketplace
Learn more about factors that can affect stock prices, and indicators used to assess stock value and growth potential.