Share price
1 Answer(s)
Sunil Kumar
There are two level at which the price for a share is evaluated.
First when the company enter in the market means when the company issue IPO, at this time the Banker evaluate the current asset and liability of the company. It also evaluate the present and future performance of the company and based on this it evaluate the price of the Share for IPO. Ex. if Banker feels that the value of the company is 1000000/- and it issue 100000 share on IPO then the price of share on IPO will be 10/-each.
Latter in the Secondary market the value will be based on the Performance of the company and investor sentiments. if it is doing good performance then there will be more buyer than seller and price for the share will rise other wise it will fall.
Sep 21 2015 12:08 PM
First when the company enter in the market means when the company issue IPO, at this time the Banker evaluate the current asset and liability of the company. It also evaluate the present and future performance of the company and based on this it evaluate the price of the Share for IPO. Ex. if Banker feels that the value of the company is 1000000/- and it issue 100000 share on IPO then the price of share on IPO will be 10/-each.
Latter in the Secondary market the value will be based on the Performance of the company and investor sentiments. if it is doing good performance then there will be more buyer than seller and price for the share will rise other wise it will fall.