Discussion 08 Stock Valuation

A variety of factors can cause the price of a stock to go up ordown. The factors range from objective factors such as specific news about a companys earnings to subjective factors such as a change in how investors feel about the stock market in general. The rise or fall of the price of a sock is dependent on the market demand for the stock. If the demand for a stock is high, the price ought to rise given that the stock is limited in supply. Where more people want to buy a stock (also called demand) than sell it (supply), then the price moves up because of the law of demand and supply. Alternatively, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall because of the law of demand and supply does not equate a companys value with the stock price. Therefore, the basic reason that causes the price of a stock to rise or fall is the number of people who want to own the stock versus the current owners of the stock. Besides, social economic and infrastructuralfactors do not allow investors make the