The document discusses how stock prices are discovered in the market based on a company's earnings per share and market demand and sentiment. It provides an example of how an initial stock price of Rs. 100 per share could increase to Rs. 1200 per share if the company's earnings per share rises from Rs. 10 to Rs. 100 due to increased demand for the company's products, causing the price-to-earnings ratio to rise from 10 to 12. This demonstrates how both earnings and market demand factor into a stock's market price.
The document discusses how stock prices are discovered in the market based on a company's earnings per share and market demand and sentiment. It provides an example of how an initial stock price of Rs. 100 per share could increase to Rs. 1200 per share if the company's earnings per share rises from Rs. 10 to Rs. 100 due to increased demand for the company's products, causing the price-to-earnings ratio to rise from 10 to 12. This demonstrates how both earnings and market demand factor into a stock's market price.