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Question
Stock is Valued in the Books of Accounts based on
Stock is Valued in the Books of Accounts based on
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Solution
After a firm goes public and its shares begin trading on a stock exchange, the price of its shares in the market is decided by supply and demand. The price will rise if there is a significant demand for its shares owing to positive reasons. The net asset value of a firm is computed by adding total assets and subtracting liabilities, and is referred to as ”book value”. Divide the book value by the number of outstanding stock shares to get the book value per share.
After a firm goes public and its shares begin trading on a stock exchange, the price of its shares in the market is decided by supply and demand. The price will rise if there is a significant demand for its shares owing to positive reasons. The net asset value of a firm is computed by adding total assets and subtracting liabilities, and is referred to as ”book value”. Divide the book value by the number of outstanding stock shares to get the book value per share.
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