Question

Market value per share is measured as:

a. The selling price of the stock as indicated by the most recent transactions.
b. Total market value of stock issued divided by numbers of shares of stock outstanding.
c. Total stockholders' equity divided by numbers of shares of stock outstanding.
d. Par value of common stock divided by numbers of shares of stock outstanding.

Answer 1

The market value per share reflects the stock's current trading price, typically seen as the price from the most recent transactions and tied closely to the concept of capital gains.

Step-by-step explanation:

The market value per share is measured as the selling price of the stock as indicated by the most recent transactions. This represents the price at which the stock is currently trading in the market. To determine this, a financial investor might buy a share of stock, for instance in Wal-Mart for $45, and then later sell that share of stock to someone else for $60.

The difference, or increase, in the stock value is known as a capital gain. The concept is akin to what the Standard & Poor's 500 (S&P 500) does, which averages the changes in prices of stocks to determine overall market performance, though on a much larger scale effectively covering many companies and transactions.