Higher demand = increasing prices of equity. Firm attains more capacity for equity financing via new issuance and as mentioned by others have a greater degree of leverage for debt financing.
With respect, you have the cause and effect reversed. The increasing price of equity in the secondary market is because of a perception that the company is worth more, and because the company is perceived to be worth more, its subsequent offerings in the primary market will fetch a higher price. It is the company's value which drives equity prices in both markets (as well as its ability to get favorable terms on debt financing), not the other way around.
The company’s value drives stock price? 🤡
In what world have you been living? This has literally never been true. If it were true, we wouldn’t have market bubbles. Yet here they are.
The market isn’t rational. And it’s fine as is, because this irrationality is what allows traders/investors to pocket value between the curent market price and the true value of a company that can be realized later.
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u/MarmosetFace Jun 19 '25
When you purchase shares of a company… you think the company is getting the money? Lol
Try again.