The process of converting a company’s financial performance into stock price is known as what?

The process of converting a company’s financial performance into stock price is known as valuation. Valuation involves assessing various financial metrics, such as earnings, revenue, and future growth potential, to estimate the fair value of a company's stock. This analysis allows investors to make informed decisions regarding whether a stock is overvalued or undervalued based on its financial performance relative to its current market price.

Market capitalization refers to the total market value of a company's outstanding shares and is calculated by multiplying the stock price by the total number of outstanding shares. While it can give an idea of the company's size, it does not directly represent the relationship between financial performance and stock price.

Earnings adjustment typically refers to modifications made to a company's earnings figures, such as adjustments for one-time events or non-recurring items. While it can play a role in valuation, it is not the overarching process of converting financial performance into stock price.

Dividend yield measures the annual dividends paid to shareholders relative to the stock price. While it reflects the income generated from owning shares, it does not encapsulate the broader process of linking overall financial performance to stock valuation.