Stock prices represent the price that the buyer is willing
to pay and the price that the seller is willing to sell. The
prices of a stock are based on the agreed price between the
buyer and seller. These prices of the shares in a corporation
are usually determined at the stock exchange where these stocks
trade respectively.
The fortunes of a corporation’s business determine
its stock prices. If the company is doing well, the prices
of the shares will go up. A business where its sales are growing
and it’s profitable, it will be likely that there will
be many willing buyers who are ready to pay a premium price
for the company shares. On the other hand, if a company is
losing money due to poor management and shrinking revenue,
there will be many sellers looking to dump their shares at
a discount. The price of the stock will drop.
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