The value of a common share today depends on:

Question

Quizplus · Accepted Answer

The value of a common share is primarily determined by its expected future dividends and the discount rate. Other factors, such as expected future earnings per share, may also play a role in determining a share's value, but the expected future dividends are the most significant factor. Industry analysts may provide insight into a company's prospects, but their opinions alone do not determine a share's value. The number of authorized shares is an administrative matter that does not directly affect the value of existing shares.

The Value of a Common Share Today Depends On