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8.Are stock prices an accurate measure of the true value of a company? Explain your answer.

8.Are stock prices an accurate measure of the true value of a company? Explain your answer.

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Answer - No , the stock prices are not the true measure of the actual value the company. The stock prices going up or down only represent the sentiments of the public for or against the company. These trends reflect the vision of the public and in how much demand the share of the company are. It is only the market value of the company and not the actual value.

The actual value of the company is reflected by the intrinsic value of the company which is estimated with the help of the financial statements , tangible and intangible assets etc. These help to show the true value of the company and not the stock prices. The stock prices only show the performance of the company in the current period

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