If a company has 10,000 shares of stock issued and investors are willing to pay $100 per share, then the company has a valuation of $1 million.
Depending on a company's financial results and outlook, the price of their stock may go up or down. As the price of a company's stock goes up, companies often split their stock to keep the price per share lower. When a company splits the shares of its stock it increases the number of shares while reducing the cost per share.
In today's world investors can log into an investing website and purchase shares of almost any public company in any amount. You could ask your parents to help you set up an account on e-trade or Scottrade and you could buy a few shares of stock pretty cheap.
From my knowledge investing is like this scenario:
I pay 10,000$ to a company to start up in return for 20% of the company.
So if the company is worth 1,000,000$ in a year i will own 200,000$
Is that correct? and if not please correct me? Also if not how much money would i own if i get 20% and the company is worth 1 million?
