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A Regressional Impact of Earning per Share on Market Value of Share: A Case Study Cement Industry of Pakistan

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  • Muhammad Zulqarnain Jatoi
  • Ghulam Shabir
  • Naqvi Hamad
  • Nadeem Iqbal
  • Khan Muhammad

Abstract

The price of equity shares depends on the two basic factors, demand and supply. Price fluctuates with the phenomenon of buying and selling. Prices usually move up with buying and go down with selling of equity shares. Many accounting variables affect market value of equity share and Earnings Per Share is one of them. The purpose of this research is to find out the effect of Earning 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 thirteen Cement industries were selected for the analysis and secondary data was used for this purpose. The data was analyzed through SPSS software and represented in the form of tables and graphs. The finding shows that Earning Per Share (EPS) significantly impact the Market Value of Share. This study improves the understanding of share prices in broadening the base of market values of share, which may assist in creating a better investment culture in country that translates economy into a robust economy.

Suggested Citation

  • Muhammad Zulqarnain Jatoi & Ghulam Shabir & Naqvi Hamad & Nadeem Iqbal & Khan Muhammad, 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, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(4), pages 221-227, October.
    • Handle: RePEc:hur:ijaraf:v:4:y:2014:i:4:p:221-227
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    References listed on IDEAS

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    1. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    2. Dechow, Patricia M. & Hutton, Amy P. & Sloan, Richard G., 1999. "An empirical assessment of the residual income valuation model1," Journal of Accounting and Economics, Elsevier, vol. 26(1-3), pages 1-34, January.
    3. Collins, Daniel W. & Kothari, S. P., 1989. "An analysis of intertemporal and cross-sectional determinants of earnings response coefficients," Journal of Accounting and Economics, Elsevier, vol. 11(2-3), pages 143-181, July.
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    2. Loann D. Desboulets, 2017. "Co-movements in Market Prices and Fundamentals: A Semiparametric Multivariate GARCH Approach," AMSE Working Papers 1851, Aix-Marseille School of Economics, France.
    3. BĂRNUŢ Cătălin-Florin, 2020. "Stock Market Performance Analysis Of Pharmaceutical, It And Automotive Companies From Poland," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 177-188, July.

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