Open AccessIMPACT OF EARNING PER SHARE AND PRICE EARNINGS RATIO ON MARKET PRICE OF SHARE: A STUDY ON AUTO SECTOR IN INDIA
Author(s) -
Pankaj Kumar
Publication year - 2017
Publication title -
international journal of research - granthaalayah
Language(s) - English
Resource type - Journals
eISSN - 2394-3629
pISSN - 2350-0530
DOI - 10.29121/granthaalayah.v5.i2.2017.1710
Subject(s) - price–earnings ratio , earnings per share , share price , market share , earnings , market share analysis , economics , business , market price , financial economics , econometrics , monetary economics , order (exchange) , market microstructure , finance , stock exchange
The purpose of this study is to examine the impact of earning per share and price earnings ratio on the market price of share of company, therefore in this study market price of share is dependent variable, while earning per share and price earnings ratio are dependent variables and study is exploratory in nature. The study was carried out for a sample of eight companies of auto sector based on Nifty auto index and for a period of five consecutive financial years from 2011-12 to 2015-16. Multiple regression analysis was employed to predict the impact of earning per share and price earnings ratio on market price of share of select companies of auto sector. The result of the study concludes that earning per share has found to be a very strong forecaster of market price of share, while price earnings ratio impact significantly on the prediction of market price of share of select companies of auto sector as whole. The implications and limitations of study are also discussed.