The price of a commodity, the economist makes us to believe is determined by the forces of demand
and supply in a free economy. Even if we accept the economists’ view, what factors influence demand
and supply behavior? Price? Yes, but not all the time, at least there are some other factors. In the
securities market, whether the primary or the secondary market, the price of equity is significantly
influenced by a number of factors which include book value of the firm, dividend per share, earnings
per share, price earning ratio and dividend cover (Gompers, Ishii & Metrick, 2003).