Cover of: Fundamental factors influencing price earnings relationships | Sudhir Krishnamurthi

Fundamental factors influencing price earnings relationships

a cross sectional study
  • 22 Pages
  • 1.61 MB
  • English
Sloan School of Management, Massachusetts Institute of Technology , Cambridge, Mass
Other titlesPrice earnings relationships, Fundamental factors influencing.
StatementSudhir Krishnamurthi, Ram Ramakrishnan.
SeriesWorking paper / Alfred P. Sloan School of Management -- WP 1719-85, Working paper (Sloan School of Management) -- 1719-85.
ContributionsRamakrishnan, Ram T. S., Sloan School of Management.
The Physical Object
Pagination22, [11] p. :
ID Numbers
Open LibraryOL14051059M

Fundamental factors influencing price earnings relationships: a cross sectional study [Krishnamurthi, Sudhir, Ramakrishnan, Ram T. S, Sloan School of Management] on *FREE* shipping on qualifying offers.

Fundamental factors influencing price earnings relationships: a cross sectional studyAuthor: Sudhir. Krishnamurthi, Ram T. Ramakrishnan. Fundamental Factors Influencing Price Earnings Relationships A Cross Sectional Study by Sudhir Krishnamurthi The Federal Reserve System and the Banks by Paul M.

Warburg Trade Marks, Trade Names and Unfair Competition in Trade by Orson D. Munn. Full text of "Fundamental factors influencing price earnings relationships: a cross sectional study" See other formats?' ^ I LIBRARIES § HDM DEC 21 WORKING PAPER ALFRED P. SLOAN SCHOOL OF MANAGEMENT FUNDAMENTAL FACTORS INFLUENCING PRICE EARNINGS RELATIONSHIPS: A CROSS SECTIONAL STUDY Sudhir Krishnamurthi* Ram Ramakrishnan* WP.

A bank's share price can also be impacted by its price-to-earnings (P/E) ratio and price-to-book (P/B) value. Common Valuation Factors Affecting Bank Share Prices.

FUNDAMENTALFACTORSINFLUENCINGPRICEEARNINGS RELATIONSHIPS:ACROSSSECTIONALSTUDY SudhirKrishnamurthi* RamRamakrishnan* WP October *AlfredP. The price-to-earnings ratio, often called the PE ratio, is the ratio of market price Fundamental factors influencing price earnings relationships book share to annual earnings per share for a company's stock.

It measures the payback period for your. The present study examined the impact ofdividend per share, earnings per share and book value per share of stock price on a sample of companieslisted in the Colombo Stock Exchange (CSE) from.

The Fundamental Approach. Fundamental analysts have a staid approach to analyzing stock performance. They look at a variety of factors that they believe influence a stock's performance. T here are several factors that go into the valuation of a currency.

Some common ones are the domestic economic performance and political stability, which drive global trading flows into, or. Introduction. Among the most familiar and widely used valuation tools are price and enterprise value multiples.

Price multiples are ratios of a stock’s market price to some measure of fundamental value per rise value multiples, by contrast, relate the total market value of all sources of a company’s capital to a measure of fundamental value for the entire company.

models were estimated to test impact of firm specific and macroeconomic factors on share price of Nepalese commercial banks. Using data of 14 banks listed in NEPSE for the period //14, the result shows that firm specific variables like earnings per share, divided per share, price earnings ratio, book value per share.

Consequently, its price-book value ratio declined from to The following graph shows the price-book value ratio as a function of the difference between the return on equity and required rate of return.

Note that when Fundamental factors influencing price earnings relationships book return on equity is equal to the cost of equity, the price is equal to the book.

relationships between stock prices and the factors that could impact on it.

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The link between fundamental factors (e.g. firm earnings, dividends and book-value per share) and stock price changes has always remained as the focus area of interest for market analysts, fund managers, and investors.

According to Fama (), a stock market is. The results of this study indicated that simultaneously there were significant influence between the Price Earnings Ratio (PER), Earning per Share (EPS), Net Profit Margin (NPM), Price to Book Value (PBV), and Risk Systematic on stock prices on companies listed in LQ45 Index we revealed the influence of fundamental factors and.

So, the object of this report will be known to all about the factors that discontinued the relationship with EPS and shock price movement that usually the investor misrepresented by the raising.

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Figure 1 PRICE-DIVIDEND RATIO AND PRICE-EARNINGS RATIO, Price-Dividend Ratio, _. Price-Earnings Ratio price-dividend ratio, this regression predicts a substantial decline in the stock market over the next year.

In fact, since this regression has consistently predicted a decline in the stock market. KEYWORDS: Capital market, fundamental factors, investment decisions.

_____ INTRODUCTION Fundamental analysis is the examination of the underlying forces that affect the well being of the economy, industry groups and companies. As with most analysis, the goal is to develop a forecast of future price movement and profit from it. factors affecting the stock market in long run are industrial production; wholesale price index and interest rate.

Sharma () examined the empirical relationship between equity share prices of different industry groups and explanatory variables such as book value per share, dividend per share, earning per share, price earnings ratio.

There are two factors that affect stock market prices. Valuations In the long run, valuation determines stock market returns. Valuations refer to how cheap are stock prices relative to earnings or the net assets. In short, if the Price-to-Earnings. FACTORS INFLUENCING FINANCIAL DECISIONS The nature of financial decisions varies from one firm to the other.

It may also be different for the same firm over a period of - Selection from Fundamentals of Financial Management, Third Edition [Book].

A technical analyst is interested in statistics about market or price performance, not the fundamental factors, the market, or the company's dividend policy. Technical analysts are interested in trading volume as a market statistic, new highs and lows, and open short positions, which could indicate future buying potential in the security.

This paper uses the two-stage least square method and uses the monthly data of investor sentiment and size effect from to Different from the linear model used in previous studies, this paper, based on the nonlinear model, explores the relationship between investor sentiment and size effect.

The study finds that investor sentiment has explanatory power to size effect and they take on. A factor is a common characteristic among a group of the equities market, it could be a particular financial ratio such as the price–earnings (P/E) or the book–price (B/P) ratios.

Additional objectives are: Factors frequently are intended to capture some economic intuition. An investor conducts fundamental analysis and technical analysis to predict the future price movements of securities by analyzing the Economic factors, Industrial factors and Company specific factors.

Various economic, industrial and company specific factors can have a direct bearing on prices of securities. A fundamental analysis helps an investor to understand the general behaviour of the. The most commonly met factors known to influence the demand and supply are the following: 1.

Dividends – generally speaking, once the stock is ex-dividend, the price.

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Price/Earnings = PEratio. The only two things that can affect the ratio, are the price of the stock, and the earnings.

There are two different versions of earnings, one looks at reported earnings, which looks at the past, and give you a PE ratio. So when seeking to influence using the consistency principle, the detective of influence looks for voluntary, active, and public commitments and ideally gets those commitments in writing.

For example, one recent study reduced missed appointments at health centers by 18% simply by asking the patients rather than the staff to write down.

To derive the relationship between net income growth and fundamentals, we need a measure of how investment that goes beyond retained earnings. One way to obtain such a measure is to estimate directly how much equity the firm reinvests back into its businesses in the form of net capital expenditures and investments in working capital.

The capital structure substitution theory (CSS) describes the relationship between earnings, stock price and capital structure of public companies. The equilibrium condition of the CSS theory can be easily rearranged to an asset pricing formula: = [−] where P is the current market price of public company x; E is the earnings-per-share of company x.

Two Ways to Calculate the P/B Ratio. If you choose to calculate the ratio the first way, the company's market capitalization is divided by the company's total book value from its balanceif you choose to calculate the ratio the second way (i.e., using per-share values), you must divide the company's current share price by the book value per share.

• Price to cash flow is more stable than price to earnings. The best way to analyze the fundamental factors that affect the P/E ratio is to use the single-stage Gordon growth model: • The relationships between P/E and the fundamental variables examined may change over time.

Watch for the S&P to continue climbing back up to challenge its all-time high of 3, John Jagerson & Wade Hansen are just two guys with a .Factors Affecting the Market Stock Price - The Case of the Insurance Companies Listed in Amman Stock Exchange Dr. Fouzan Al Qaisi 1 American university of Madaba, Jordan P.O.

Box:Amman Jordan Dr. Asem Tahtamouni 2 American university of Madaba, Jordan P.O. Box:Amman Jordan Dr. Mustafa AL -Qudah.