The market value of the company depends on a variety of reasons. Estimates may change dramatically.
This process is influenced by various economic and political factors.
The market value of the enterprise (object)
The market value of the enterprise (or its marketcapitalization) is defined as the sum of the market all its shares listed on the market. For a shareholder who is going to receive the income from the sale of an object, this estimate is the most important. In the process of changes in value affected by various economic (book value, earnings, dividends) and political factors.
The market perceives any information relatingenterprise (for example, it may be information about the expected drought or a scandal related to the governance). Such information can dramatically change its assessment of the market, its shares may drop significantly in price. But only provided information about an object on the market is not enough, you need to apply different actions that will reflect the real processes taking place there.
The market value can be expressed as the sum ofadded value and capital employed for the specified period. A variety of value added - is the ratio of its cost and the cost of capital, which is determined by dividing the cost of debt (borrowed capital) and the cost of equity invested.
Factors affecting the value of the object
The cost of the estimated object on the market can beto state in the form of a design index, and its market value - as a result of trade, the type of business, the solvency of a potential buyer, the presence of other objects of investment, etc. Cost is determined by the profitability and cost-effectiveness, social and economic significance, uniqueness and other characteristics of products, as well as works produced and services rendered.
The results are based on the cost valuestock prices, reflecting market expectations for its future performance. The change in equity prices (with the subsequent changes in the market value-added) determines the performance of the company's management in this area. There are many important factors, not allowing the use of the stock price in the form of the main measures to create value. The price level in the market may change and have an impact on all courses. Changes in product prices can also affect the value of market capitalization.