See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/330254081

Effects of Financial Market Variables on Stock Prices: A Review of the

Literature

Article · November 2018

DOI: 10.17265/1548-6583/2018.11.002

CITATION READS

1 3,056

4 authors:

Fatima Ruhani Md. Aminul Islam

Universiti Malaysia Perlis Universiti Malaysia Perlis
4 PUBLICATIONS   1 CITATION    160 PUBLICATIONS   1,525 CITATIONS   

SEE PROFILE SEE PROFILE

Tunku Salha Tunku Ahmad Muhammad Ruhul Quddus

Athlone Institute of Technology University of Dhaka
17 PUBLICATIONS   39 CITATIONS    3 PUBLICATIONS   1 CITATION   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

THE MODERATING EFFECTS OF THE INTERNAL OWNERSHIP ON THE RELATIONSHIP BETWEEN THE EFFECTIVENESS OF BOARD OF DIRECTORS AND EXECUTIVE
COMPENSATION WITH EARNINGS MANAGEMENT IN THE AMMAN STOCK EXCHANGE View project

Stock Pricing View project

All content following this page was uploaded by Md. Aminul Islam on 21 January 2019.

The user has requested enhancement of the downloaded file.

Journal of Modern Accounting and Auditing, November 2018, Vol. 14, No. 11, 597-610
doi: 10.17265/1548-6583/2018.11.002
D DAVID PUBLISHING

Effects of Financial Market Variables on Stock Prices: A Review

of the Literature

Fatima Ruhani, Md. Aminul Islam, Tunku Salha Tunku Ahmad

University Malaysia Perlis, Perlis, Malaysia
Muhammad Ruhul Quddus
Saad Musa Industrial Group, Chittagong, Bangladesh

Stock market plays a pivotal role in firms’ expansion and turns economic growth. In the literature, because of the
importance of stock markets to the real economy, the smooth and risk-free operation of the stock market has
attracted significant attention. The finance literature contains a large number of studies that examine the stock price
behaviour with some emphasis on the determinants of the relationship between the equity prices and the financial
market activities. The present study reviews the previous works of the effect of financial market variables and stock
price. Five selected financial market variables, market capitalization, earnings per share, price earnings multiples,
dividend yield, and trading volume are reviewed in this study. In the past literature, there are the opinions of the
positive significant relationship between market capitalization and stock price. To find the relationship between
dividend yield and stock price, there are two broad schools of thoughts. Both of the relevance and irrelevance
theory of Gordon and Modigliani have the strong evidence in the current literature that keeps on the dilemma and
provides the scopes for future research. Price-earnings multiples are analyzed in the past literature by using
different variables. Based on that, it is evidenced that price-earnings multiples have a negative significant effect on
stock price. The reviewed studies state the cointegrating relationship between the stock price and the trading
volume as the trading volume is a source of risk.

Keywords: market capitalization, dividend yield, Gordon model, Modigliani and Miller model, earnings per share,
price earnings multiples, trading volume and stock price

Introduction
A well-developed financial system is an important pre-requisite for a developed economy. Stock markets
enable firms to raise capital by issuing shares and also create an environment where those shares can be traded.
Thus stock market plays a pivotal role in firms’ expansion and turns economic growth. In the literature, because
of the importance of stock markets to the real economy, the smooth and risk-free operation of the stock market
has attracted significant attention. In the empirical capital market research literature, there is a long history

Fatima Ruhani, Ph.D., Candidate. School of Business Innovation and Technopreneurship, University Malaysia Perlis, Perlis,
Malaysia.
Md. Aminul Islam, Dr., School of Business Innovation and Technopreneurship, University Malaysia Perlis, Perlis, Malaysia.
Tunku Salha Tunku Ahmad, Dr., School of Business Innovation and Technopreneurship, University Malaysia Perlis, Perlis,
Malaysia.
Muhammad Ruhul Quddus, Chief Financial Officer, Saad Musa Industrial Group, Chittagong, Bangladesh.

 
598 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES

about the determinants of stock performance. The literature suggests that different variables are potentially
important in explaining the variations in stock performance in different economies at different times and
aspects. Policymakers, however, want to learn about the behaviour of the stock market and, more importantly,
discover how the behaviour of the stock market is moved in response to the change of different factors. Factors
that play a significant role in affecting stock price behaviour are from different segments like economic
variables, financial market variables, variables from behavioural finance, and so on.

Financial Market Variables and Stock Price

The finance literature contains a large number of studies that examine the stock price behavior with some
emphasis on the determinants of the relationship between the equity prices and the financial market activities.
Followings are the discussion on the related studies of the effect of financial market variables on stock market
returns.
Market Capitalization and Stock Price
A market capitalization calculation is a critical part of any stock valuation process. Market capitalization
(sometimes called market cap) is the total market value of all the companies’ outstanding shares. This
represents the value the market has placed on the value of the company’s equity (Ali, 2013).
Lukács (2002) investigates the relationship between stock return and market capitalization. The analysis is
based on the returns of 21 stocks listed on the Budapest Stock Exchange (BSE). First, these stocks are ranked
according to their market capitalization, and then different moments of distribution as well as normalized
moments such as skewness and kurtosis are calculated. Results are evaluated both by charts and rank
correlation. A significant relationship is demonstrated between the distribution of returns and the market
capitalization.
Ologunde, Elumilade, and Asaolu (2006) examined the relationships between stock market capitalization
rate and interest rate in Nigeria. They used the Ordinary Least Square (OLS) regression method and they found
that the prevailing interest rate exerts a positive influence on stock market capitalization rate. Also, they found
that government development stock rate exerts a negative influence on stock market capitalization rate and
prevailing interest rate exerts a negative influence on the government development stock rate. Kurihara (2016)
suggests that stock market capitalization rate is significantly influenced by the macroeconomic environment
factors such as gross domestic product, exchange rates, interest rates, current account, and money supply.
Oluwatoyin and Gbadebo (2009) examine the impact of share market capitalization on a company’s
performance. They adopt the Ordinary Least Square (OLS) analytical technique. Using the company’s annual
data for 20 years, they recommend that the confectionary company should implement policies that will
encourage an increase in their profit after tax, dividends, and turnover as these variables have positive and
statistically strong significance on the changes in the company’s performance and the value of its market
capitalization. Khrawish, Siam, and Jaradat (2010) examine the effect of interest rates on the stock market
capitalization rate in the Amman Stock Exchange (ASE) over the period 1999-2008. Based on the multiple
linear regression model and a simple regression model, the time series analysis revealed that there is a
significant and positive relationship between government prevailing interest rate (R) and stock market
capitalization rate. Subeniotis, Papadopoulos, Tampakoudis, and Tampakoudi (2011) studied the relationship
between the EU-12 stock market price indices and four crucial macroeconomic factors, using panel data

  
 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES 599

analysis. The examined variables are market capitalization, industrial production, the economic sentiment
indicator and inflation, while the 12 countries are those who have adopted the euro. The empirical results reveal
a strong effect of the first three factors, while inflation has a negative but not statistically significant coefficient.
Further, the variables that affect the stock markets positively are market capitalization and the economic
sentiment indicator. Ali (2013) investigates a group of micro and macro variables and he shows a significant
positive short and long run and the bi-directional causal relationship between market capitalization and stock
price. After that, Toraman and Başarir (2014) investigate the long run relationship between stock market
capitalization rate and interest rate in Turkey over the period 1998-2012. The long-run relationship is tested by
Johansen Co-integration tests. According to the results of the study, there is a long-run relationship between
stock market capitalization rate and interest rates.
Dividend Yield and Stock Price
The dividend yield of a stock signifies how much a company pays a dividendon its stock price. It is
calculated as a fraction of annual dividends paid by the company upon its stock price. Dividend yield is
considered an important variable that is used by Allen and Rachim (1996), Nishat and Irfan (2003), Rashid and
Rahman (2009), Nazir, Nawaz, and Gilani (2010), Suleman, Asghar, Shah, and Hamid (2011), Hussainey,
Mgbame, and Chijoke-Mgbame (2011), moreover, it is significantly explaining the effect of dividend policy on
stock market prices. All these researchers found a positive relation between dividend yield and stock price.
There are mainly two schools of thoughts available in the field of finance that presented two different
opinions about the dividend policy. One school of thought followed the opinion of Miller and Modigliani (1961)
and considered dividend policy irrelevant while the second school of thought followed the point of view of
Gordon (1963) and considered dividend policy relevant. Since the half-century passed, the question remains i.e.
whether dividend policy is relevant or not. This dilemma yet exists, which theory the companies should apply
for making their dividend decisions.
Irrelevance of Dividend Policy
Miller and Modigliani (1961) proposed irrelevance theory suggesting that the wealth of the shareholders
not be affected by dividend policy. It is argued in their theory that the value of the firm is subjected to the
firm’s earning, which comes from the company’s investment policy. The literature proposed that dividend not
affect the shareholders’ value in the world without taxes and market imperfections. They argued that dividend
and capital gain are two main ways that can contribute profits of the firm to shareholders. When a firm chooses
to distribute its profits as dividends to its shareholders, then the stock price will be reduced automatically by the
amount of a dividend per share on the ex-dividend date. So, they proposed that in a perfect market, dividend
policy does not affect the shareholder’s return. There are some voices of researchers supporting the irrelevance
dividend hypothesis which will be reviewed as follows: Brennan (1971) supported the irrelevancy theory of
Miller and Modigliani and concluded that any rejection of this theory must be based on the denying of the
principle of symmetric market rationality and the assumption of independence of irrelevant information. He
suggested that for rejection of the latter assumption, one of these following conditions must exist: Firstly,
Investors do not behave rationally. Secondly, the stock price must be subordinate of past events and expected
prospect. Black and Scholes (1974) created 25 portfolios of common stock in New York Stock Exchange for
studying the impact of dividend policy on share price from 1936 to 1966. They used the capital asset pricing
model for testing the association between dividend yield and expected return. Their findings showed no

  
600 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES

significant association between dividend yield and expected return. They reported that there is no evidence that
the difference in dividend policies will lead to different stock prices. Their findings were consistent with the
dividend irrelevance hypothesis.
Hakansson (1982) supported the irrelevance theory of Miller and Modigliani and claimed that dividends,
whether informative or not, is irrelevant to firm’s value when investors have homogeneous belief and time
additive utility and market is fully efficient. Uddin and Chowdhury (2005) selected 137 companies which were
listed on the Dhaka Stock Exchange (DSE) and studied the relationship between share price and dividend
payout. The results implied that dividend announcement does not provide value gain for investors and
shareholders experience approximately 20 % loss of value during 30 days before the announcement of dividend
to 30 days following the announcement. He suggested that the current dividend yield can reimburse the
diminished value to some extent. Generally, his findings supported the irrelevancy of dividend policy.
However, some empirical results of different researches were consistent with irrelevance dividend theory.
There are many types of research challenging the dividend irrelevance hypothesis. Baker, Farrelly, and
Edelman (1985) surveyed the 603 Chief Financial Officers (CFOs) of 562 companies which were listed on the
New York Stock Exchange (NYSE). The results of their survey showed that respondents strongly agreed that
stock prices would be affected by dividend policy. Baker and Powell (2012) surveyed 603 Chief Financial
Officers of US companies which were listed on the NYSE. They reported that a majority of respondents (90
percent) agreed that dividend policy has an impact on the value of the firm and affectsa firm’s cost of capital
too.
Ali and Chowdhury (2010) examined stock price reactions of listed Private Commercial Banks (PCBs) in
Bangladesh surrounding 44 days of the dividend announcement dates. They employed a standard event study
methodology to analyze the stock price reaction for dividend announcement. Out of 25 listed sample banks in
the observation period, market-adjusted stock price declines for 11 banks, rises for six banks, and no changes
for eight banks, and statistical pooled t-test also reveals that stock price reaction to dividend announcement is
not statistically significant. The findings state that, dividend announcement does not convey any information
due to the strong contribution of the insider trading as well as some other influencing factors in the capital
market.
Misbah et al. (2013) analyzed the stock price volatility by taking non-financial firms listed on Karachi
Stock Exchange. The study is based on panel data that covers 35 firms from 2001 to 2011. The main variable is
the dividend yield. The other explanatory variables taken by the study are: size, growth, earning per share, and
earnings volatility. The research study has concluded that price volatility of stocks has a negative relationship
with dividend yield and earnings per share. The research has identified a positive relationship between price
volatility with size and growth in assets of firms. Also, the research has identified that there is no relationship
between price volatility and earning volatility of firms in Pakistan.
Uddin and Uddin (2014) showed the dividend scenario of the listed commercial bank of Dhaka Stock
Exchange (DSE) from the fiscal year 2000 to 2013. They investigated the effect of dividend announcement on
stock prices based on the 28 DSE listed commercial banks. In this context declaring dividends during the fiscal
year 2012-2013 has been considered as the observation period and event study methodology has been used. The
result by using event study methodology indicates that there is no effect of dividend announcement on stock
prices over the observation periods.

  
 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES 601

The Relevance of Dividend Policy Based on Uncertainty of Future Dividends

Gordon (1962) suggested a valuation model relating the market value of the stock with dividend policy.
Gordon studied dividend policy and the market price of the shares and proposed that the dividend policy of
firms affect the market value of stocks even in the perfect capital market. He stated that investors might prefer
present dividend instead of future capital gains because the future situation is uncertain even if in the perfect
capital market. Indeed, he explained that many investors might prefer dividend in hand in order to avoid risk
related to future capital gain. He also proposed that there is a direct relationship between dividend policy and
the market value of share even if the internal rate of return and the required rate of return will be the same. In
Gordon’s (1962) constant growth model, the share price of the firm is subordinate of discounted flow of future
dividends. Diamond (1967) selected 255 US-based firms as a sample and studied the association of firm’s value
with dividends and retained earnings in 1961 and 1962. Diamond (1967) reported that there is only weak
evidence that investors prefer dividends to future capital gain. His findings also showed a negative association
between the growth of the company and preference of dividend.
George (2015) investigates the relevance of dividend payments on common stock prices of quoted equities at
the Nairobi Securities Exchange (NSE) for the period 2008-2012. The result shows that dividends are relevant
for the average stockholder since most investors prefer cash payments to otherwise reinvested dividends.
The Relevance of Dividend Policy Based on Information Content of Dividend
Miller and Modigliani (1961) suggested that in an imperfect market, the dividend may affect the share
price. So dividend announcements can be interpreted as a signal of the future profitability of the firm. Asquith
and Mullins Jr. (1983) used a sample of 168 companies paying a dividend for the first time or paying a
dividend after at least 10-year interruption and studied the relationship between market reaction and dividend
announcement. They analyzed the daily abnormal stock returns for the 10-day period prior and the 10-day
period following the dividend announcement. Their findings implied an approximate abnormal return of +3.7
percent for two days after the announcement. Furthermore, they used a cross-sectional regression and reported
that the first dividends’ amount has a significant positive impact on the excess returns on the day of the
dividend announcement. They concluded that the magnitude of changes in dividends could be also important.
Amihud and Murgia (1997) used 200 German firms as a sample and studied the stock price response to
dividend announcement for the period of 1988 to 1992. They considered 255 cases of rising/increasein dividend
and 51 cases of decline in the dividend. Their results reinforced this statement that dividend changes may be a
signal of the prospect of firms. They presented the abnormal return of +0.965 percent for a dividend increase
and the abnormal return of -1.73 percent for dividend decrease. Travlos, Trigeorgis, and Vafeas (2001) studied
the stock price response to the announcement of a stock dividend and a dividend increase in the Cyprus Stock
Exchange from 1985 to 1995. They considered 41 announcements of cash dividend and 39 events of dividend
increase. Their results provided strong evidence for supporting the signalling hypothesis. They reported
prominent excess returns for both cash dividend announcement and cash dividend increase.
Ahmad and Naz (2015) investigated the relative importance of dividend and retained earnings in share
price determination to examine the implication of Bird-in-the-Hand theory on Pakistani firms. The analysis
documents 77 firms from 11 different sectors listed on Karachi Stock Exchange from 2006 to 2013. Firms are
categorized according to two business stages, growth firms and mature firms. Findings suggest that both
dividend and retained earnings play a role in share price determination.

  
602 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES

Impact of Dividend Policy on Firm’s Risk

Ben-Zion and Shalit (1975) studied the impact of size, leverage, and firm’s dividend records on the risk of
the common stock. They selected the 1,000 largest US industrial corporations in 1970 as a sample and
examined the relationship between alternative risk measures with size, leverage, and dividend records. The
results of their research showed that the firm’s size, leverage, and dividend have a significant relationship with
the firm’s risk measures and are important determinants of a firm’s risk. They reported that a firm’s risk has a
significant negative relationship with both dividend yield and size, but leverage has a significant negative
impact on the firm’s risk. Rozeff (1982) studied the determinants of dividend payout ratios. He suggested that
beta, agency cost and growth determine the optimal dividend payout. He argued that higher beta coefficients
are related to lower dividends payout showing that there is a negative association between a firm’s risk and
dividend payout. He explained that since firms with high beta may have higher external financing cost, they are
more likely to choose a lower dividend payout policy. Eades (1982) studied the relationship between dividend
yield and the firm’s risk in the US stock market. He regressed the dividend yield against firm’s beta. The results
of his study discovered a significant negative relationship between dividend yield and the firm’s beta showing
that riskier firms may have a lower dividend paid.
Another study conducted by Ho (2002) relevant to the dividend policy in which he uses the panel data
approach and fixed effect regression model. Results of his study show the positive relationship between
dividend policy and size of Australian firm and liquidity of Japanese firms. He found the negative relation
between dividend policy and risk in case of only Japanese firms. The overall industrial effect of Australia and
Japan is found to be significant.
Impact of Dividend Policy on Share Price Volatility
Baskin (1989) used a different method and examined the association between dividend policy and stock
price volatility rather than returns. He added some control variables for examining the association between
share price volatility and dividend yield. These control variables are earning volatility, firm’s size, debt, and
growth. These control variables do not only have a clear effect on stock price volatility but they also affect
dividend yield. Nazir et al. (2010) used 73 firms listed in Karachi Stock Exchange (KSE) as a sample and
studied the relationship between share price volatility and dividend policy for the period of 2003 to 2008. They
applied the fixed effect and random effect models on panel data. They reported that share price volatility has a
significant negative association with dividend yield and dividend payout. They also reported that size and
leverage have a non-significant negative effect on share price volatility. Suleman et al. (2011) studied the
association of dividend policy with share price volatility in Pakistan. They extracted data from Karachi Stock
Exchange regarding five important sectors for the period of 2005 to 2009. They used multiple regressions
model for their analysis. Contrary to Baskin’s (1989) results, their findings showed that share price volatility
has a significant positive relationship with dividend yield. They also reported that share price volatility has a
significant negative relationship with growth.
Hussainey et al. (2011) examined the relationship between share price volatility and dividend policy in the
UK. They selected 123 English companies and the period of their study was from 1998 to 2007. They used
multiple regression analyses for exploring the relationship of share price with dividend yield and dividend
payout ratio. They added size, level of debt, earning volatility, and level of growth as control variables to their
model. Consistent to Allen and Rachim (1996) Australia results, Hussainey et al. (2011) found a significant

  
 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES 603

negative relationship between share price volatility and payout ratio. They also found a negative relationship
between share price volatility and dividend yield. Their findings discovered that the payout ratio is the
predominant determinant of the share price volatility and size and debt have the strongest relationship with
price volatility amongst control variables.
Hashemijoo, Ardekani, and Younesi (2012) studied the relationship between dividend policy and share
price volatility with a focus on consumer product companies listed in the Malaysian stock market. For this
purpose, a sample of 84 companies from 142 consumer product companies listed in the main market of Bursa
Malaysia were selected and the relationship between share price volatility with two main measurements of
dividend policy, dividend yield and payout, was examined by applying multiple regression for a period of six
years from 2005 to 2010. The primarily regression model was expanded by adding control variables including
size, earnings volatility, leverage, debt, and growth. The empirical results of the study showed a significant
negative relationship between share price volatility with two main measurements of dividend policy which are
dividend yield and dividend payout. Moreover, a significant negative relationship between share price volatility
and size is found. Based on the findings of the study, dividend yield and size have the most impact on share
price volatility amongst predictor variables.
Earnings per Share and Stock Price Behavior
The revenue earned by a company after meeting the cost of production, then interest, depreciation, and tax
belong to the equity shareholders. These earnings divided by the number of outstanding equity shares is
referred to as Earnings per Share (EPS) (Nichols & Wahlen, 2004; Bhatt & Sumangala, 2012). Basu (1977) in
the earnings multiplier model (P/E) argued that earnings are the most important factor that determines the
financial health and real value of a company. Investors make decisions depending on public information like
earnings which are taken as indicators of a company’s financial health and prospects and thus determining the
share price (Al-Malkawi, 2007).
It is suggested from empirical studies that earnings per share are one of the strongest factors affecting the
share price (Sharma, 2011). The pioneers of the studies on determinants of share price were Collins (1957).
Both of them in their independent studies identified earnings as one of the factors influencing share prices.
They showed that there is a positive relationship between share price and both earnings and dividends. After
that, Ball and Brown (1968) and Baskin (1989) argued that the earnings per share havea constructive
relationship with market value. Kaundal and Sharma (1986) described the effect of earnings per share on the
market value of shares by using a linear regression model. Malhotra (1987) concluded that the earnings per
share had a constructive and significant wave on the market value of equity shares. His targeted population was
the four sectors of industries general engineering, cotton textile, food products and paper convening a period of
four years from 1982 to 1985. Baskin (1989) and Collins and Kothari (1989) linked to stock price with earning
per share and all of them confirm the positive link. Ohlson (1995) discusses the role of earning, book value, and
dividends in equity valuation. Collins, Pincus, and Xie (1999) discussed the effect of negative earning on equity
valuation. Dechow, Hutton, and Sloan (1999) studies the effect of residual income and the equity valuation.
Zhao (2000) studies the relationship between stock prices and firm EPS using a regression model. He
found that firm EPS has an important impact on stock prices, especially on long horizons, but the hypothesis
that moves one-for-one with ex-ante is rejected. Harasty and Roulet (2000) work on 17 developed countries and
show that stock prices are co-integrated with firm EPS. Tuli and Mittal (2001) indicated that earnings per share

  
604 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES

were found to be important in determining the share price. In broader perspective Nieh and Lee (2002) use
three-year rolling regressions to analyze the relationship between stock prices and firm EPS. They try to
forecast stock prices on the standard and poor 500 indexes with the short term firm EPS, but find that the
relationship is not stable over time. It gradually changes from a significantly negative to no relationship than to
positive; although insignificant relationship. Malakar and Gupta (2002) exposed that Earnings per share is
found to be a significant determinant of share value by considering share value of eight major cement
companies in India for the period 1968 to 1988 and five variables, namely, dividend per share, retained
earnings, earnings per share, the share price, and sales proceeds. Hsing (2014) uses a structural Vector
Autoregressive (VAR) model for the simultaneous determination of firm fundamental and finds that there is an
inverse relationship between stock prices and firm EPS. Al-Deehani (2005) examined the determinants of share
price for companies listed on the Kuwait Stock Exchange. The empirical findings showed that the variables;
earnings per share, cash dividends per share, return on equity, price to book value ratio and cash flow per share
are all highly correlated with the share price.
Zarezadeh et al. (2011) showed in their study that there is a positive and significant relationship between
Earnings per Share (EPS) and the stock price of the company. Sharma (2011) in his study concluded that
earnings per share are the strongest determinant of the market value in a constructive track. Recently, Bhatt and
Sumangala (2012) described the earning per share effect on the equity market value of share with the
publication of basic contributions concerningthe top 50 Indian companies. They found that EPS impacts the
market value of an equity share in the Indian context. In contrary of previous research, Ali (2013) suggests that
earnings per share have aninsignificant relationship with a stock price both in the short run and long run. Also
no causal relationship has been found between them. Having consistency with Ali (2013), Umar and Musa
(2013) examine the relationship between stock prices and firm EPS from 2005 to 2009. A simple linear
regression model was employed on a panel of 140 Nigerian firms from a total population of 216 firms’ operated
in Nigerian Stock Exchange (NSE). It was discovered that an insignificant relationship exists between stock
prices and firm EPS in Nigeria. Firm EPS has no predictive power on stock prices. It was suggested that firm
EPS should not be relied upon for the prediction of the behaviour of stock prices in Nigeria.
Jatoi, Shabir, Hamad, Iqbal, and Muhammad (2014) investigate the effect of Earnings per Share (EPS) on
the Market Value of Share (MVS) and their mutual relationship. The targeted population was the Pakistani
cement industries that were listed in the Stock Exchange Commission of Pakistan (SECP). The 13 cement
industries were selected for the analysis and secondary data were used for this purpose. The finding shows that
EPS significantly impacts the Market Value of Share. Velnampy and Pratheepkanth (2017) take up the sample
of EPS changes from Milanka companies in the Colombo Stock Exchange (CSE) firms in Sri Lanka from 2006
to 2010. In his study, more than 70% of Milanka companies have a positive relationship between earnings per
share and share price movements. In this analysis, 44% of the share price of Milanka companies is determined
by other factors without the EPS. Overall, this provides evidence that the Milanka companies consider the
earnings per share of other companies, in order to keep the company image and customer satisfaction.
Price Earnings Multiples and Stock Market Return
The Price to Earnings (P/E) ratio is still the most widely used valuation tool in the stock markets. Analysts
use it pricing new shares in initial public offerings. The P/E ratio is also used as a measure of relative value
when comparing listed companies. The company is having a higher P/E ratio than a rival in the same area of

  
 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES 605

business which usually means bad value for the investor. Prospective P/E ratios build in average expectations
about future growth prospects. A high P/E ratio typically indicates that the market as a whole expects
significant future earnings growth (Gottwald, 2012).
Basu (1977) in the earnings multiplier model (P/E) argued that earnings are the most important factor that
determines the financial health and real value of a company. Investors make decisions depending on public
information like earnings which are taken as indicators of a company’s financial health and prospects and thus
determining the share price (Al-Malkawi, 2007). Knowledge of the impact of earnings on share prices is highly
appreciable as it would help in determining price volatility and in the prediction of price movement to enable
firms to enhance their market value and investors to maximize their wealth (Zarezadeh et al., 2011).
The empirical results of the research of Zarezadeh et al. (2011) indicate that there is a negative and
significant relationship between Dividends per Share (DPS) and Price to Earnings ratio (P/E). Ndinyo (2011)
studied the effect of P/E ratio on the performance of common stocks at the NSE. Results showed that high P/E
portfolios seem to have earned higher rates of return as compared to the average stock. Low P/E portfolios
earned less return than the average stock.
Recently, Ali (2013) studied the relationship of price-earnings multiples and stock prices. He found a
significant negative relationship in the short run, but in the long run, it is negative, insignificant. Unidirectional
causality has been found between price-earnings multiples and stock price. P/E increases when investors are
willing to pay more per unit of earnings while the earnings remain stable. P/E also grows when both the stock
price and the earnings per share increase, however, the increase of stock price must be sharper than the increase
in the earnings per share. Another scenario of increasing P/E takes place, when stock price remains stable
despite there is a decrease in the earnings per share. The price-earnings ratio does not change when there is a
balance between the growth of the stock price and the earnings per share. On the contrary, P/E declines when
the willingness of investors to pay the price per unit falls as well as when the price paid per stock by investors’
increases in a slower pace than the earnings per shares (Ali, 2013). This research assumes that price-earnings
multiples have a negative influence over stock market return.
Trading Volume and Stock Market Return
The concept of the volume impact is built on the fact that prices need volume to move, thus, the high
volatility of stock prices may be produced as a consequence of volume volatility and trading activities (Sabri,
2009). Various studies reported that there are significant relationships between volume and stock price
movement and volatility, because trading volume is a source of risk because of the flow of information. Blume,
Mackinlay, and Terker (1989) stated that a portion of the losses on S & P stocks in October, 1987 was related
to the magnitude of the trading volume. However, the positive volatility-volume relation is documented by
Jones, Gautam, and Lipson (1994). Basci, Ozyildinm, and Aydogan (1996) reported that stock price levels and
trading volume in Turkish stock markets are co-integrated. Saatccioglu and Starks (1998) found that volume
leads tostock prices changes in four out of the six emerging markets.
Chan, Hameed, and Tong (2000) found that trading volume for foreign stocks is strongly associated with
NYSE opening price volatility. Säfvenblad (2000) found that Swedish index returns exhibit high
autocorrelation when trading volume is low. Hsin, Guo, Tseng, and Luo (2003) examined the empirical
evidence on the impact of speculative trading on return volatilities in Taiwan stock markets and found
speculative trading activities through day trades, which increases the intraday price volatility. Song, Tan, and

  
606 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES

Yunfeng (2005) examined the roles of the number of trades, size of trades, and share volume in the
volatility-volume relation in the Shanghai Stock Exchange and confirmed that mainly the number of trades
drives the volatility volume relation. Henry and McKenzie (2006) examined the relationship between volume
and volatility allowing for the impact of short sales in Hong-Kong market and found that the asymmetric
bidirectional relationship exists between volatility and volume. Griffin, Nardari and Stulz (2007) investigated
the dynamic relation between market-wide trading activity and returns in 46 markets and reported the strong
positive relationship between turnover and past returns. Sabri (2009) examined the price-volume movements in
the Arab Stock Markets, in order to determine the impact of changes in trade volume on the volatility of stock
prices as expressed by the unified stock price index. The research covers a sample of eight out of the 15 Arab
Stock Markets included in the Arab Monetary Fund database, using monthly data from 1994 to 2006. The study
found that there is an increase in both trading volume and stock price volatility, which may be considered as a
recent phenomenon in the majority of the Arab Stock Markets. The study also found that the volume-stock
price movements are significantly integrated for all selected markets, while the highest correlation coefficient
between volume and stock price movement was found in Saudi Stock Market, Amman Stock Market, Muscat
Stock Market, and Kuwait Stock Market respectively. Finally, the correlation between volume and prices
movement is higher in the stock markets of the oil Arab states compared to the non-oil Arab states.
Mutalib (2011) investigated the dynamics of the relationship between trading volume and returns of the
Nigerian capital market. The study employed Granger causality tests to examine dynamic (causal)
return-volume relation using daily stock data of 27 equities listed on the floor of Nigerian Stock Exchange for
the period January 2009 to December 2010. The empirical results indicated, in general, a mild causal relation
between stock returns and trading volumes for individual assets but on the overall, weak evidence of a dynamic
(causal) relation running from trading volume to market return was found. Aggarwal and Mougoue (2011)
report an insignificant contemporaneous correlation between return volatility and trading volume.
Pathirawasam (2011) conducted a study to examine the relationship between trading volume and stock returns.
The sample of the study consisted of 266 stocks traded at the Colombo Stock Exchange (CSE) from February
2000 to December 2008. The study revealed that stock returns are positively related to the contemporary
change in trading volume. Tripathy (2011) conducted a study to investigate the dynamic relationship between
stock return and trading volume of Indian stock market by using Bivariate Regression model, Vector Auto
Correction Model (VECM), VAR and Johansen’s Cointegration test. The study showed that there is
bi-directional causality between trading volume and stock return volatility.
Choi, Jiang, Kang, and Yoon (2012) give evidence of a strong relationship (contemporaneous as well as
dynamic) between return and volume. Attari, Rafiq, and Awan (2012) carried out a study to measure the
relationship between trading volume and returns; and a change in trading volume and returns of stocks in
Pakistan. The study applied various techniques such as Unit root tests and Generalized Autoregressive
Conditional Heteroskedasticity (GARCH) on the data to determine the relationship between the variables above.
The GARCH results indicated a significant positive relationship between trading volume and returns, indicating
that rising market goes with rising volume and vice versa. Gworo (2013) examined the price-volume
movements in the NSE and implied a weak correlation between the variables. Gebka (2012) investigated the
dynamic relationship between index returns, return volatility, and trading volume for eight Asian markets and
the US. The study revealed that trading volume, especially on the Asian markets, depended on shocks in
domestic and foreign returns as well as on volatility, especially those shocks originating in the US.

  
 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES 607

Celik (2013) tested the relationship between trading volume and return in Istanbul Stock Exchange (ISE)
by using intraday ISE-30 index data and trading volume as a proxy for information arrival for the period
between 04.02.2005 to 30.04.2010. The results indicated a positive relationship between information arrival
and volatility. Achieng (2013) carried out a similar study and the results indicated that major variations of stock
prices and trading volume were explained by other factors as opposed to the relationship between the two
variables. Kamuti (2013) found that there was a significant positive relationship between price and volume. Ali
(2013) found that trading volume has an insignificant positive relationship with the stock price but in the long
run, it is a significant positive. Furthermore, unidirectional causality has been found between trading volume
and stock price. Gebka and Wohar (2013) analyzed the causality between past trading volume and index returns
in the Pacific Basin countries. Their OLS results indicate no causal link between trading volume and returns.
Heryan (2014) also founded an insignificant relationship between trading volume and stock prices
volatility. Heryán (2014) examines whether the prices volatility of selected world financial companies’ shares
differs within both samples, below its average trading volume and the above. The study estimated GARCH-M
models from daily data from 13 selected financial companies within after crisis period from 2010 to 2013. It
was not founded any strong significant relationship between trading volume and stock prices volatility.

Conclusion and Discussion

The factors that influence share prices could either be internal factors, such as earnings, dividend, book
value or external factors such as interest rate, government regulations, foreign exchange rate. Several such
factors have been identified by previous empirical research. The pioneering works on share price determinants
identified dividend, net profit, operating earnings, and book value as the factors influencing share prices.
Following these works, there have been various attempts to identify the determinants of share prices for
different markets. To present a bunch of factors is identified that play the significant role in stock price. To
ensure the sound operation and continued growth of the capital market of a country, more studies are needed in
this regards to finding the key determinants of stock price and the role played by them.

References
Achieng, O. G. (2013). The relationship between trading volume and stock prices of firms quoted at the Nairobi securities
exchange (Unpublished MBA Research Project, University of Nairobi, Kenya).
Aggarwal, R., & Mougou, E. M. (2011). Trading volume and exchange rate volatility: Evidence for the sequential arrival of
information hypothesis. Journal of Banking and Finance, 35(10), 2690-2703.
Ahmad, N., & Naz, S. (2015). Impact of dividend and retained earnings decision on stock prices: A comparative study of growth
and mature firms listed in Pakistan. Sci. Int. (Lahore), 27(6), 6353-6359.
Al-Deehani, T. M. (2005). Determinants of dividend policy: The case of Kuwait. The Arab Journal of Economic and
Administrative Sciences, 19(2), 59-76.
Al-Malkawi, H. N. (2007). Determinants of corporate dividend policy in Jordan: An application of the Tobit model. Journal of
Applied Accounting Research, 23, 44-70.
Ali, B. (2013). The impact of selected micro and macroeconomic variables on the stock prices of emerging stock market: A case
of Dhaka Stock Exchange (DSE). Interdisciplinary Journal of Research in Business, 1, 08-16.
Ali, M. B., & Chowdhury, T. A. (2010). Effect of dividend on stock price in emerging stock market: A study on the listed private
commercial banks in DSE. International Journal of Economics and Finance, 2(4), 52-64.
Allen, D. E., & Rachim, V. S. (1996). Dividend policy and stock price volatility: Australian evidence. Applied Financial
Economics, 6(2), 175-188.
Amihud, Y., & Murgia, M. (1997). Dividends, taxes, and signalling: Evidence from Germany. Journal of Finance, 52, 397-408.

  
608 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES

Asquith, P., & Mullins, D. (1983). The impact of initiating dividend payments on shareholder wealth. Journal of Business, 56,
77-96.
Attari, M. I. J., Rafiq, S., & Awan, H. M. (2012). The dynamic relationship between stock volatility and trading volume. Asian
Economic and Financial Review, 2(8), 1085-1097.
Baker, H. K., & Powell, G. E. (2012). Dividend policy in Indonesia: Survey evidence from executives. Journal of Asia Business
Studies, 6(1), 79-92.
Baker, H. K., Farrelly, G. E., & Edelman, R. B. (1985). A survey of management views on dividend policy. Financial
Management, 14(3), 78-84
Ball, R., & Brown, P. (1968). An empirical evaluation of accounting income numbers. Journal of Accounting Research, 6(2),
159-178.
Basci, E., Ozyildinm, S., & Aydogan, K. (1996). A note on price-volume dynamics in an emerging stock market. Journal of
Banking & Finance, 20, 389-400.
Baskin, J. (1989). Dividend policy and the volatility of common stocks. The Journal of Portfolio Management, 15(3), 19-25.
Basu, S. (1977). Investment performance of common stocks in relation to their price-earnings ratios: A test of the efficient market
hypothesis. The Journal of Finance, 32(3), 663-682. Retrieved from https://doi.org/10.1111/j.1540-6261.1977.tb01979.x
Ben-Zion, U., & Shalit, S. S. (1975). Size, leverage, and dividend record as determinants of equity risk. The Journal of Finance,
30(4), 1015-1026.
Bhatt, P., & Sumangala, J. K. (2012). Impact of earnings per share on market value of an equity share: An empirical study in
Indian capital market. Journal of Finance, Accounting & Management, 3(2), 1-14.
Black, F., & Scholes, M. S. (1974). The effect of dividend yield and dividend policy on common stock prices and return. Journal
of Financial Economics, 1(1), 1-22.
Blume, M. E., Mackinlay, A. C., & Terker, B. (1989). Order imbalances and stock movements on October 19 and 20, 1987.
Journal of Finance, 44, 827-848.
Brennan, M. (1971). A note on dividend irrelevance and the Gordon valuation model. The Journal of Finance, 26(5), 1115-1121.
Celik, S. (2013). New evidence on the relation between trading volume and volatility. Business and Economic Research, 3(1),
176-186.
Chan, K., Hameed, A., & Tong, W. (2000). Profitability of momentum strategies in the international equity markets. Journal of
Financial and Quantitative Analysis, 35, 153-172.
Choi, K. H., Jiang, Z. H., Kang, S. H., & Yoon, S. M. (2012). Relationship between trading volume and asymmetric volatility in
the Korean stock market. Modern Economy, 3, 584-589.
Collins, D., & Kothari, S., (1989). An analysis of the cross-sectional and intertemporal determinants of earnings response
coefficients. Journal of Accounting and Economics, 11, 143-181.
Collins, D., Pincus, M., & Xie, H. (1999). Equity valuation and negative earnings: The role of book value of equity. The
Accounting Review, 74(1), 29-61.
Collins, J. (1957). How to study the behavior of bank stocks. The Analysts Journal, 13(2), 109-113.
Dechow, P. M., Hutton, A. P., & Sloan, R. G. (1999). An empirical assessment of the residual income valuation model. Journal of
Accounting and Economics, 26(1), 1-34.
Diamond, J. J. (1967). Earnings distribution and the valuation of shares: Some recent evidence. Journal of Financial and
Quantitative Analysis, 2, 15-30.
Eades, K. M. (1982). Empirical evidence on dividends as a signal of firm value. Journal of Financial and Quantitative Analysis,
17, 471-500.
Gebka, B. (2012). The dynamic relation between returns, trading volume and volatility: Lessons from spillovers between Asia and
the United States. Bulletin of Economic Research, 64(1), 65-90.
Gebka, B., & Wohar, M. E. (2013). Causality between trading volume and returns: Evidence from quantile regressions.
International Review of Economics & Finance, 27, 144-159
George Omwansa, M. (2015). The influence of dividends policy on market share prices at the Nairobi Securities Exchange. Asian
Research Journal of Business Management, 24(1), 1-19.
Gordon, M. J. (1962). The savings, investment and valuation of the corporation. Review of Economics and Statistics, 45, 37-51.
Gordon, M. J. (1963). Optimum investment and financing policy. Journal of Finance, 18, 264-272.
Gottwald, R. (2012). The use of the P/E ratio to stock valuation. European Grant Projects, Results, Research and Development,
and Science, 31(2000), 21-24.

  
 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES 609

Griffin, M., Nardari, F., & Stulz, R. M. (2007). Do investors trade more when stocks have performed well? Evidence from 46
countries. Review of Financial Studies, 20(3), 905-951.
Gworo, C. O. (2013). The relationship between trading volume and price volatility of shares in the Nairobi Securities Exchange
(Unpublished MBA Research Project, University of Nairobi, Kenya).
Hakansson, N. H. (1982). To pay or not to pay dividend. The Journal of Finance, 37(2), 415-428.
Harasty, H., & Roulet, J. (2000). Modeling stock market returns. Journal of Portfolio Management, 26(2), 33.
Hashemijoo, M., Mahdavi Ardekani, A., & Younesi, N. (2012). The impact of dividend policy on share price volatility in the
Malaysian stock market. Journal of Business Studies Quarterly, 4(10), 111-129. Retrieved from
http://ezproxy.lib.monash.edu.au/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=91711854&sit
e=ehost-live&scope=site
Henry, O. T., & McKenzie, M. (2006). The impact of short selling on the price volume relationship: Evidence from Hong Kong.
Journal of Business, 79, 671-691.
Heryán, T. (2014). Stock prices volatility and trading volume: Evidence from selected world financial companies’ shares.
Proceedings of the 14th International Conference on Finance and Banking, c, 117-125. Retrieved from
http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcAuth=ORCID&SrcApp=OrcidOrg&DestLin
kType=FullRecord&DestApp=WOS_CPL&KeyUT=WOS:000345575000013&KeyUID=WOS:000345575000013
Ho, H. (2002). Dividend policies in Australia and Japan. International Advances in Economics, 2(9), 91-100.
Hsin, C.-W., Guo, W.-C., Tseng, S.-S., & Luo, W.-C. (2003). The impact of speculative trading on stock return volatility: The
evidence from Taiwan. Global Finance Journal, 14(3), 243-270.
Hsing, Y. (2014). Impacts of macroeconomic factors on the stock market in Estonia. Journal of Economics and Development
Studies, 2(2), 23-31.
Hussainey, K., Mgbame, C. O., & Chijoke-Mgbame, A. M. (2011). Dividend policy and share price volatility: UK evidence.
Journal of Risk Finance, 12(1), 57-68.
Jatoi, M. Z., Shabir, G., Hamad, N., Iqbal, N., & Muhammad, K. (2014). A regressional impact of earning per share on market
value of share: A case study cement industry of Pakistan. International Journal of Academic Research in Accounting,
Finance and Management Sciences, 4(4), 221-227. Retrieved from http://doi.org/10.6007/IJARAFMS/v4-i4/1323
Jones, C. M., Kaul, G., & Lipson, M. L. (1994). Transactions, volume, and volatility. Review of Financial Studies, 7(4), 641-651.
Kamuti, H. M. (2013). The dynamic relationship between stock price volatility and trading volume at the Nairobi Securities
Exchange (Unpublished MBA Research Project, University of Nairobi, Kenya).
Khrawish, H. A., Siam, W. Z., & Jaradat, M. (2010). The relationships between stock market capitalization rate and interest rate:
Evidence from Jordan. Exchange Organizational Behavior Teaching Journal, 2(2), 60-66.
Kaundal, R. K., & Sharma, S. (1986). Stock market integration examining linkages between India and selected Asian markets.
Foreign Trade Review, 45, 3-18.
Kurihara, Y. (2016). Stock prices, foreign exchange reserves, and interest rates in emerging and developing economies in Asia.
International Journal of Business and Social Science, 7(9), 10-15.
Lukács, P. (2002). Stock return distribution and market capitalisation. Hungarian Statistical Review, (7), 138-148.
Malakar, B., & Gupta, R. (2002). Determinants of share price—A system approach: Modified model. Finance India, 16(4),
1409-1418.
Malhotra, V. (1987). Determinants & equity prices in India. Shimla: Himachal University.
Miller, M. H., & Modigliani, F. (1961). Dividend policy, growth and the valuation of shares. The Journal of Business, 34(4),
411-433.
Misbah, S., Ahmad, S., Muhammad, J. A., Muhammad, S., Sayyad, U.-A., & Khan, S.-U.-R. (2013). Stock price volatility in
relation to dividend policy; A case study of Karachi stock market. Middle East Journal of Business, 13(3), 426-431.
Retrieved from http://doi.org/10.5829/idosi.mejsr.2013.13.3.1752
Mutalib, A. (2011). Trading volume and stock return dynamics: The Nigerian evidence. Working Paper. Social Science Research
Network.
Nazir, M. S., Nawaz, M. M., & Gilani, U. J. (2010). Relationship between economic growth and stock market development.
African Journal of Business Management, 4(16), 3473-3479.
Ndinyo, S. (2011). Relationship between price-earnings ratio and investment performance of common stocks at the Nairobi Stock
Exchange (Unpublished MBA Report, University of Nairobi).

  
 610 EFFECTS OF FINANCIAL MARKET VARIABLES ON STOCK PRICES

Nichols, D. C., & Wahlen J. M. (2004). How do earnings numbers relate to stock returns? A review of classic accounting research
with updated evidence. Accounting Horizons, 18(4), 263-286.
Nieh, C. C., & Lee, C. F. (2001). Dynamic relationship between stock returns and exchange rates for G7 countries. The Quarterly
Review of Economics and Finance, 41(4), 477-490. Retrieved April 29, 2008, from Business Source Premier Database.
Nishat, M., & Irfan, C. M. (2003). Dividend policy and stock price volatility in Pakistan. 11th Pacific Basin Finance, Economics
and Accounting Conference.
Ohlson, J. A. (1995). Earnings, book values and dividends in equity valuation. Contemporary Accounting Research, 11(2),
661-687. Retrieved from http://dx.doi.org/10.1111/j.1911-3846.1995.tb00461.x
Ologunde, A. O., Elumilade, D. O., & Asaolu, T. O. (2006). Stock market capitalization and interest rate in Nigeria: A time series
analysis. International Research Journal of Finance and Economics, 4, 154-166.
Oluwatoyin, M., & Gbadebo, O. O. (2009). The impact of share market capitalization on a company’s performance? A case study
in the Nigerian confectionary industry. African Journal of Business Management, 3(May), 220-226.
Pathirawasam, C. (2011). The relationship between trading volume and stock returns. Journal of Competitiveness, 3, 41-49.
Rashid, A., & Rahman, A. Z. (2009). Dividend policy and stock price volatility: Evidence from Bangladesh. Journal of Applied
Business and Economics, 8(4), 71-81.
Rozeff, M. S. (1982), Growth, beta and agency costs as determinants of dividend payout ratios. Journal of Financial Research, 5,
249-259.
Saatccioglu, K., & Starks, L. T. (1998). The stock price-volume relationship in emerging stock markets: The case of Latin
America. International Journal of Forecasting, 14, 215-225.
Sabri, N. R. (2009). The impact of trading volume on stock price volatility in the Arab economy. Journal of Derivatives & Hedge
Funds, 14(3-4), 285-298. Retrieved from http://doi.org/10.1057/jdhf.2008.22
Sharma, S. (2011). Determinants of equity share prices in India. Journal of Arts, Science & Commerce, 2(4), 51-60.
Song, F. (F. M.), Tan, H., & Wu, Y. F. (2005). Trade size, trade frequency, and the volatility-volume relation. The Journal of Risk
Finance, 6(5), 424-437.
Subeniotis, D. N., Papadopoulos, D. L., Tampakoudis, I. A., & Tampakoudi, A. (2011). How inflation, market capitalization,
industrial production and the economic sentiment indicator affect the EU-12 stock markets. European Research Studies
Journal, 14(1), 103-117.
Suleman, M., Asghar, M., Ali Shah, S., & Hamid, K. (2011). Impact of dividend policy on stock price risk: Empirical evidence
from equity market of Pakistan. Far East Journal of Psychology and Business, 4(1), 45-52.
Säfvenblad, P. (2000). Trading volume and autocorrelation: Empirical evidence from the Stockholm Stock Exchange. Journal of
Banking and Finance, 24(8), 1275-1287.
Toraman, C., & Basarir, Ç. (2014). The long run relationship between stock market capitalization rate and interest rate:
Co-integration approach. Procedia-Social and Behavioral Sciences, 143, 1070-1073. Retrieved from
http://Doi.Org/10.1016/J.Sbspro.2014.07.557
Travlos, N., Trigeorgis, L., & Vafeas, N. (2001). Shareholder wealth effects of dividend policy changes in an emerging stock
market: The case of Cyprus. Multinational Finance Journal, 5(2), 87-112.
Tripathy, N. (2011). The relation between price changes and trading volume: A study in Indian Stock Exchange. Interdisciplinary
Journal of Research in Business, 51(2), 485-505.
Tuli, N., & Mittal, R. K. (2001). Determinants of price-earnings ratio. Finance India, 15(4), 1235-1250.
Uddin, M. H., & Chowdhury, G. M. (2005). Effect of dividend announcement on shareholders’ value: Evidence from Dhaka
Stock Exchange. Journal of Business Research, 1, 4-13.
Uddin, M. N., & Uddin, M. J. (2014). Dividend announcement of the commercial banks in DSE: Scenario and effect on stock
price. International Journal of Ethics in Social Sciences, 2(1), 1-13.
Umar, M. S., & Musa, T. B. (2013). Stock prices and firm earning per share in Nigeria. Journal of Chemical Information and
Modeling, 53(9), 1689-1699. Retrieved from https://doi.org/10.1017/cbo9781107415324.004
Velnampy, T., & Pratheepkanth, P. (2017). Earning per share (EPS) and its impact on share price in Milanka companies in
Colombo Stock Exchange (CSE), Sri Lanka. International Journal of Education and Research, 3(10), 23.
Zarezadeh, E., Mirfakhr-Al-Dini, S. H., Dehavi, H. D., Armesh, H., Manafi, M., & Zraezadehand, S. (2011). Fitting the
relationship between financial variables and stock price through fuzzy regression case study: Iran Khodro Company.
International Journal of Business and Social Science, 2(11), 140-180.
Zhao, X. Q. (2000). Stock prices, inflation and output: Evidence from China. Applied Economic Letters, 6, 509-511.

  

View publication stats