Market Price of Common Stock Definition and Explanation

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Quick Definition

The company stock price during the period reported.

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Explanation of Market Price of Common Stock

Also called Share Price, this figure is simply the price of one share of stock. This is the most visible piece of financial data for a company, and the media tends to focus on this single piece of financial data.

This value can be sometimes found in the Income Statement, but if not, it is just as easily found by going to a stock-price lookup website such as nasdaq.com or nyse.com, searching for the historical stock price for the day the financial statement was submitted.

Importance of Market Price of Common Stock

The Market Price of Common Stock as a sole financial indicator is useless. Comparing this value to the Earnings per Share provides a limited view on how “expensive” the stock is – companies with a high Price to Earnings Ratio have a stock price that may be overvalued – meaning there is high demand to purchase the stock and the price may have gone up.

Stock traders also focus on this value, as their incremental puchases and sell-offs are how they intend to make a profit. Stock investors rely on much more financial data than just the stock price.