Why are stock prices on the London Stock Exchange so low?

Question

If I am correct, the LSE quotes its prices in pence and a pence is 1/100th of a British pound (like a cent is to a dollar). So as an example Tesco is trading at 435. This is 435 pence so that is 4.35 pounds which at the current exchange rate of 2 pounds to 1 dollar is about just $9.7. Is that correct? Why then are stock prices so much lower in the UK than they are in the US? Or am I mistaken about that?

Answer 1

A $10000 investment still costs $10000. In England you just get more shares. But, remember, each share probably represents a smaller piece of the total company than is typical with a US quoted company. It's just a custom of the market place.