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Imagine a company is newly listed in BSE. It is offering 100 share each with a face value of 10 rupees. Let A, B, C & D are 4 persons who shows interest in buying that share. Let's consider that each of them buying 25 shares and they are not trading the share with any one. What will happen to the share . Does it remains in the same price ? Or it depends on the growth of the company ?

I am new one to share market and not good at these stuffs. So kindly help me.

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    It doesn't change price until person E comes and wants to purchase shares, or one of A, B, C, or D decides they want to buy more shares or sell shares they already have. These decisions might depend on the growth of the company.
    – The Photon
    Feb 4, 2019 at 18:07
  • @The photon could you plz post this comment in answer Feb 4, 2019 at 18:27
  • @Umar, thanks for the check-mark, but feel free to hold off for 24 hours and see if someone else has a better (more informative or clearer) explanation of how prices are set.
    – The Photon
    Feb 4, 2019 at 18:31
  • Sure. But how does the company profited? If the company if running profitable they will giVe the dividend. But how long they will give it. Feb 4, 2019 at 18:41
  • After A, B, C, and D buy their shares, they are the owners of the company. If they don't like how it's being managed (for example, how much dividends are being issued), they can fire the CEO and hire a new one.
    – The Photon
    Feb 4, 2019 at 18:45

2 Answers 2

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It doesn't actually really have a price until person E comes and wants to purchase shares, or one of A, B, C, or D decides they want to buy more shares or sell shares they already have. These decisions might depend on the growth of the company.

If none of those things happen (the stock is not being traded at all), then you really have no way to know what is the current price of a stock except by making an offer to buy or sell yourself, and see if the offer is accepted.

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The value of a stock is worth what someone is will to pay for it. Its basically as simple as that.

Yesterday someone was willing to buy Maxwell Technologies at $3

Today Tesla board thought it was worth $4.75 and are planning to buy all the shares for $4.75. So today its worth 55% more.

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