Market price of shares

The market price of the share increases due to profits and  reserves... If a company has profits but doest declare dividends,it will still result in increase in the shreholder's wealth b'coz shareholder's are  the ultimate owners of the company and they have all rights on residual profits.. Market price basically is the present value of all future dividends and dividends includes capital appreciation..Therefore,if the company is earning profits ,there will be capital appreciation and hence market value will increase. Anybody correct me if i am wrong.

Market price of share is also the Multiple of Earning per share * Price earning ratio ..

P/E of similar companies are also compared along with the future earning potential of the company and are traded.  Market price is also driven by the investor psychology ...as in some cases druing the boom - shares can be hig priced as to reflect the multiples higher than the normal (P/E) so its improtant to take right decisions during such situation or have a plan to exit after booking profits.

I dont think this is the correct reply to Yogesh's question. Isnt it? Can anybody explain?