Accounting Information and Stock Market Price: Evidence from Banking Companies in Bangladesh
DOI:
https://doi.org/10.64102/rujssbs.0473Keywords:
Accounting information, Banking companies, Financial institutions, Stock market price in BangladeshAbstract
Investment in the stock market requires informed decision-making, as investment decisions based on accounting information are less likely to be incorrect, and the stock market operates efficiently. Thus, this paper aims to examine the association between accounting information (AI) and stock market price (MP) and to find the impact of AI on the stock market prices of Bangladeshi banking companies. A sample of 210, comprising 30 publicly listed banks, was chosen from 2017 to 2023. A robust random-effect regression estimation model was applied to reflect the findings. The study revealed that net asset value, dividend per share, and leverage positively and significantly influenced stock MP. Additionally, the price-earnings ratio, EPS, ROA, and ROE had a positive impact, albeit insignificantly. The more assets banks engaged in, the more significantly their stock market value declined. Investors make investment decisions without verifying the appropriate information to determine the price of shares. Investors must make decisions by adequately understanding the company's leverage ratio, EPS, ROA, and ROE information. The study findings will benefit existing and potential investors in making informed decisions about buying, holding, and/or selling investments. Based on this research, regulatory bodies, bank managers, and policymakers can make informed decisions.
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