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Bazza
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Joined: Sat Mar 21, 2009 11:16 am
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Location: Loughborough
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Rhakios
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Joined: Thu Apr 07, 2005 12:18 am
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Location: Midlands, UK
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 Posted: Sat Oct 16, 2010 7:03 pm Post subject: |
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So, you never wondered how the little spot of financial bother we all find ourselves in came about? 
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Bye, Rhakios |
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johnhudson
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Joined: Wed Aug 03, 2005 2:37 pm
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| Posted: Sat Oct 16, 2010 8:45 pm Post subject: |
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The number of shares can increase for several reasons; the company issues more shares to gain more money to invest; the company splits existing shares so that the price per share drops and you don't get silly figures for one share. Do this a few times and the total number of shares can go up quite a bit.
If you are buying shares at $300 a share, you are expecting a return of at least $15 a share per annum; one way of obtaining this is if the share price goes up - in the same way as people expect the value of their houses to rise. The other is that Apple can afford to give you $15 a share every year.
The more Apple can give you per share each year, the more people are prepared to buy the shares to get the return; so the price goes up. The problems come when Apple hits the buffers and can no longer offer that rate of return. |
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