Question

Which of the following is FALSE regarding a publicly traded company's stock price?

		The company can buy back shares from the public, in turn driving up the stock price.
		Changes in the stock price occur at most every few minutes.
		One of the main reasons the stock price changes has to do with supply and demand
		If company "A" has a higher stock price than company "B", that means the entire company "A" is valued more than company "B"

Answer 1

Correct answer: If company "A" has a higher stock price than company "B", that means the entire company "A" is valued more than company "B"

Value of Company depends upon stocks outstanding, stock price and market value of Debt ( + if any other capital like preferred stock).

Suppose,

Company A's stock price $100 and outstanding shares is 500,000

Value of Company A's equity = 100*500,000 = $50,000,000

Company B's stock price $50 and outstanding shares is 2,000,000

Value of Company B's equity = 50*2,000,000 = $100,000,000

Company B value is higher than company A, despite of stock A has higher price than stock B.