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Definition

<p style="text-align: justify;">The <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">price</span> of a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">share</span> in the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">market</span>. This is the result of continuous trading - an interaction of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">supply</span> and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">demand</span>. The price of a share in the market is determined by the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">average</span> perception of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">investors</span> as a group of the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">company</span>'s future <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">profits</span> and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">dividends</span>. Perceptions can change very quickly and with them share prices. The market price is often compared to a company's <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">net asset value</span> (NAV) per share to determine whether it is <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">cheap</span> or <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">expensive</span>. This comparison has the problem that often the NAV is based on <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">asset</span> values which are out of date or which include <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">intangible assets</span> such as <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">goodwill</span>.</p>