In general, the price of a company's shares follows the trend in its earnings and dividends.

Question

Quizplus · Accepted Answer

The price of a company's shares is positively correlated with its earnings and dividends. When a company has strong earnings and pays out regular dividends, investors are more likely to buy its shares, driving up the share price. Conversely, when a company's earnings and dividends are weak, its share price may decline as investors sell their shares.

In General, the Price of a Company's Shares Follows the Trend