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Effect of Financial Performance on Share Prices in the Indian Corporate Sector: An Empirical Study

2010; SAGE Publishing; Volume: 35; Issue: 3 Linguagem: Inglês

10.1177/0258042x1003500304

2321-0710

A. Vijayakumar,

Financial Reporting and Valuation Research

In the last two decades, emerging capital markets have undergone drastic changes in terms of market microstructure changes, specifically in secondary markets. One of the policy concerns is the factor determining equity prices in markets. This study examined the extent to which some financial performance indicators affect the stock price. The study uses the correlation analysis, factor analysis and multiple linear regressions to analyze the impact of financial performance on the market price of the share. The regression results of the study reveals that variables taken for the study, i.e., Book value, Earnings per share, Dividend cover, Growth rate and Dividend yield have a positive association with market price of Ashok Leyland and Dividend per share and Price - Earnings ratio have a negative association with the market price of its equity shares.