Shareholder's equity is (assets - liabilities), in case the market value of its share goes down, the value of equity held by shareholders goes down, Isnt it a paradox?
1 Answer(s)
Binny
There is no connection between the shareholders equity in the balance sheet and the market value of shares.
These 2 are independent of each other.
The balance sheet shareholders equity is determined by fundamentals.
The market price of shares is determined by other factors as well like macro economic etc
Dec 31 2013 04:14 PM
These 2 are independent of each other.
The balance sheet shareholders equity is determined by fundamentals.
The market price of shares is determined by other factors as well like macro economic etc