What is a share price?

A share price – or a stock price – is the amount it would cost to buy one share in a company. The price of a share is not fixed, but fluctuates according to market conditions. It will likely increase if the company is perceived to be doing well, or fall if the company isn’t meeting expectations.

Is a share price of more than $50 worth it?

A share price of more than $50 may turn off the average investor because it requires a cash outlay of at least $5,000 to buy 100 shares. That's a large financial commitment to make to one stock. As a result, a company that has had a good run and has seen its shares rise from $20 to $60 might choose to do a two-for-one stock split.

How are share prices determined?

Initially, share prices are determined through a company’s initial public offering (IPO), in which the price of one share is set according to the perceived supply of, and demand for, that company’s stock.

What are shares and how do they work?

What Are Shares? Shares are units of equity ownership in a corporation. For some companies, shares exist as a financial asset providing for an equal distribution of any residual profits, if any are declared, in the form of dividends. Shareholders of a stock that pays no dividends do not participate in a distribution of profits.