Post on 07-Apr-2018
transcript
8/4/2019 Research Lipi
1/29
The goal of the corporate entities is to maximize the value of the shareholders investment in the firm. Managers pursue this goal through their investment, financing and dividend decision.Investment decision involve with the selection of positive net present value projects whilefinancing decision involve with selection of a capital structure that would minimize the cost ofcapital of the firm (Hamid and Chowdhury, 2005). In addition, managers need to decidedividend decision on a regular basis that involves with whether to payout earnings toshareholders to reduce agency problem (Jensen and Meckling, 1976). However the question
remains whether paying out of earnings would essentially create value for the shareholders ornot. In this respect, we have found two schools of thought of dividend policy: (1) dividendirrelevance and (2) dividend relevance. Both of the thoughts have conflict with each other andnone of them provides complete and satisfactory guidelines. However, both of the schools aretrying to establish their thoughts, which led to dividend controversy. A great deal of theoreticaland empirical research on dividend effects has been done over the last several decades. Thispaper is intended to identify the impact of dividend announcement information on the stockprices of 25 DSE listed Private Commercial Banks (PCBs) in Bangladesh in the year 2008.
In Bangladesh, most investors use a broker to buy and sell stocks. Thesebrokers simply take an investor's order and execute it for them. These brokerslegally cannot offer any advice to the investors in facing their decision aboutwhere to invest. It is conceivable that the dealings of all such brokers mustalso be scrutinised to ascertain whether they have been performing their dutieslegally. Especially those, who do not have any knowledge and information ontechnical and specialized matters, can easily be influenced by such brokers.This could lead the investors to take some wrong decisions.
What needs to be considered before buying shares of a particular company?When an investor considers buying a company's share, he or she needs toassess what the real worth of the shares is, by determining how much moneythey will receive in future as dividends from those shares and what the worthof those shares would be when he or she, as an investor, would sell those.These are specific factors that an investor needs to analyse while selecting acompany for purchasing its share.
3.1. Problem Statement
Stock prices change every day as a result of market forces.By this we mean that share
prices change because ofsupply and demand. If more people want to buy a stock (demand)
than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a
stock than buy it, there would be greater supply than demand, and the price would fall.
Understanding supply and demand is easy. What is difficult to comprehend is what makes
people like a particular stock and dislike another stock. This comes down to figuring outwhat news is positive for a company and what news is negative. There are many answers
to this problem and just about any investor you ask has their own ideas and strategies. So,
http://www.investopedia.com/terms/s/supply.asphttp://www.investopedia.com/terms/d/demand.asphttp://www.investopedia.com/terms/d/demand.asphttp://www.investopedia.com/terms/s/supply.asp8/4/2019 Research Lipi
2/29
why do stock prices change? The best answer is that nobody really knows for sure. Some
believe that it isn't possible to predict how stock prices will change, while others think that
by drawing charts and looking at past price movements, we can determine when to buy
and sell. The only thing we do know is that stocks are volatile and can change in price
extremely rapidly.
Concerning to this matter I wanted to study on why the share price changes. I chose some
variables that can be responsible for the movement of share price. Which variable is more
responsible that is to measure as well as IFIC Banks share price movements is also
compared to all other banks listed in DSE.
.
3.2. Literature Review
Financial Statements are historical documents. They summarize what has happened during a
particular period. Most users of financial statements are concerned with what will happen in the
future. For example- stockholders are concerned with future earnings and dividends and creditors
are concerned with the companys future ability to repay its debt. These users rely on financial
statement analysis, which involves examining trends in key financial data, comparing financial data
across companies, and analyzing financial ratios to assess the financial health and future prospects
of the company.
Earning per share:
http://www.investopedia.com/terms/v/volatility.asphttp://www.investopedia.com/terms/v/volatility.asp8/4/2019 Research Lipi
3/29
Earning per share is computed by dividing net income available for common stock holders by the
average number of common shares outstanding during the year. Net income available for common
stockholders is net income minus dividend paid to the owners of the companys preferred stock.
So with earnings per share we are looking at the amount of money left over for shareholders - after
taxes - and "normalizing" those profits by stating them on a per share basis. For example Company
A and Company B might each have earnings of $1 million. But Company A has 1 million shares
outstanding, while Company B has 10 million shares outstanding. So Company A's EPS is $1.00,
while Company B's earnings are $0.10 per share.
40
Price Earning Ratio:
The price to earnings ratio (denoted P/E) measures the relationship between the share prices to its
earnings per share. It is considered one of the most important metric of a company because
comparing two similar companies P/E shows us which a better value is. Sometimes, people will
refer to this ratio as the price to earnings multiple, or simply the multiple of a company.
The price earning ratio is widely used by investors. A high price-earning ratio means that investors
are willing to pay a premium for the companys stock presumably because the company is
expected to have higher than average future earnings growth. Conversely, if investors believe a
companys future earnings growth prospects are limited, the companys price earning ratio would be
relatively low. If a company makes $5 and has a share price of $50, then the P/E is simply 10 (50
Market price per sharePrice-earning ratio =
Earning per share
Net Income Preferred dividend
Earning per Share =Average number of common share outstanding
http://investing-school.com/definition/earnings-per-share-eps/http://investing-school.com/definition/earnings-per-share-eps/8/4/2019 Research Lipi
4/29
divided by 5). With this information, an investor can clearly see that the general public is currently
willing to pay $10 for every $1 that the company makes. This also means that the lower this
number, the better value the investment potentially is.
Dividend Payout Ratio:
Investors in a companys stock make money in two ways increase in the market value of stock and
dividends. In general, earning should be retained in a company and not paid out in dividends as long
as rate of return on funds invested inside the company exceeds the rate of return that stockholders
could earn on alternative investments outside the company.
41
The dividend payout ratio gauges the portion of current earnings being paid out in dividends. This
ratio is computed by dividing the dividends per share by the earning per share for common stock:
These formulas derive the percentage of profit that a company returns to its shareholders as
dividends. This information is useful in two ways; it indicates the extent to which profits justify the
current payout ratio, dividend level, and dividend growth rate, and it also provides an estimate of
the level of reinvestment the company is currently practicing. Most new companies have low
dividend payout ratios due to the necessity for reinvestment of profits into the core business or debt
reduction activity. As companies mature and gain financial stability, dividend payout ratios increase
commensurately in most cases. Therefore, dividend payout ratios are generally a very rough
indicator of financial health, since these ratios do not take into consideration the rate of
reinvestment, debt reduction, or the maturity of the companys business interests and investments.
In some cases, dividend payout ratios may exceed 100%; this is usually not a sustainable situation.
Unusually high dividend payout ratios may result from a one-time hit to net income, ongoing tax
advantages from high payouts, or expected near-term growth in income that has not yet
materialized.
Retained Earnings:
Dividend per share
Dividend payout ratio=
Earning per share
8/4/2019 Research Lipi
5/29
In accounting, retained earnings refers to the portion ofnet income which is retained by the
corporation rather than distributed to its owners as dividends. Similarly, if the corporation takes a
loss, then that loss is retained and called variously retained losses, accumulated losses or
accumulated deficit. Retained earnings and losses are cumulative from year to year with losses
offsetting earnings.
42
Retained earnings are reported in the shareholders' equity section of thebalance sheet. Companies
with net accumulated losses may refer to negative shareholders' equity as a shareholders' deficit. A
complete report of the retained earnings or retained losses is presented in the Statement of Retained
Earnings or Statement of Retained Losses.
Return on Total Asset:
Return on total asset is a measure of operating performance. It is defined as follows:
Interest expense is added back to net income to show what earnings would have been if the
company had no debt. The interest expense is placed on an after tax basis by multiplying it by the
factor (1- tax rate).The return on assets (ROA) percentage shows how profitable a company's
assets are in generating revenue.
Return on assets is an indicator of how profitable a company is before leverage, and is compared
with companies in the same industry. Since the figure for total assets of the company depends on the
carrying valueof the assets, some caution is required for companies whose carrying value may not
correspond to the actual market value.
Return on common stock holders equity:
The return on common stock holders equity is based on the book value of common stock holders
equity. It is computed as follows:
Net income + [Interest expense *(1- Tax Rate)]
Return on total asset =
Average total asset
http://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Dividendshttp://en.wikipedia.org/wiki/Shareholders'_equityhttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Statement_of_Retained_Earningshttp://en.wikipedia.org/wiki/Statement_of_Retained_Earningshttp://en.wikipedia.org/wiki/Gearinghttp://en.wikipedia.org/wiki/Book_valuehttp://en.wikipedia.org/wiki/Book_valuehttp://en.wikipedia.org/wiki/Market_valuehttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Dividendshttp://en.wikipedia.org/wiki/Shareholders'_equityhttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Statement_of_Retained_Earningshttp://en.wikipedia.org/wiki/Statement_of_Retained_Earningshttp://en.wikipedia.org/wiki/Gearinghttp://en.wikipedia.org/wiki/Book_valuehttp://en.wikipedia.org/wiki/Market_value8/4/2019 Research Lipi
6/29
43
Return on equity (ROE) measures the rate of return on the ownership interest (shareholders' equity)
of the common stock owners. It measures a firm's efficiency at generating profits from every unit of
shareholders' equity (also known as net assets or assets minus liabilities). ROE shows how well a
company uses investment funds to generate earnings growth. ROEs between 15% and 20% areconsidered desirable.
Correlation:
The relationship is of a quantitative nature, the appropriate statistical tool for discovering and
measuring the relationship and expressing it in a brief formula is known as correlation Croxton
and Cowden.
The problem of analyzing the relation between different series can be broken into three steps:
Determining whether a relation exists, if it does, measuring it.
Testing whether it is significant, and
Establishing the cause- and effect relation (if any).
Regression:
After having established the fact that two variables are closely related, we may interest in estimatingthe value of one variable given the value of another. The statistical tool with the help of which we
are in a position to estimate the unknown values of one variable to known values of another variable
is called Regression. With the help of regression, we are in a position to find out the average
probable change in one variable given a certain amount of change in another.
Return on common stock holders equity =
Net income preferred dividends
Average common stockholders equity
http://en.wikipedia.org/wiki/Shareholders'_equityhttp://en.wikipedia.org/wiki/Shareholders'_equity8/4/2019 Research Lipi
7/29
44
3.3. Data Collection and Analysis
All the data collected for the report are found from the annual report of the banks. I process the data
by calculating the numbers taken from annual reports. It took many times to prepare the data. Than
after calculating and preparing data I used SPSS 14, analytical software to find out the regression
and correlation of the independent variables EPS, PER, DPR, ROA, ROE, ROI, Net profit after
taxes, Retained Earnings and growth rate of the organization with the dependent variable market
price of the share.
The processed data and their analysis are given below-AB Bank
CorrelationEPS Pearson Correlation .601
Sig. (2-tailed) .066
PER Pearson Correlation -.309
Sig. (2-tailed) .385
DPR (%) Pearson Correlation .305
Sig. (2-tailed) .425
ROA (%) Pearson Correlation .794(**)
Sig. (2-tailed) .006
ROI (%) Pearson Correlation .765(*)
Sig. (2-tailed) .016
ROE (%) Pearson Correlation .549
Sig. (2-tailed) .100
Net profit after tax(mill)
Pearson Correlation .649(*)
Sig. (2-tailed) .042
Retained earnings Pearson Correlation .457
Sig. (2-tailed) .185
Growth rate(%) Pearson Correlation .284
Sig. (2-tailed) .427
From this table of correlation we can see that in AB Bank Limited the market price is highly
correlated with ROA in a significant level of 0.01 which has a calculated value of 0.794. It is also
highly correlated with ROI and Net profit after Taxes, which have value of 0.765 and 0.649 with a
significant level of 0.05.
45Regression (Coefficients)
8/4/2019 Research Lipi
8/29
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 77.827 250.421 .311 .766
ROA (%) 502.025 144.340 .818 3.478 .013
In this table the ROA is seen the most constant with market price. So we can show this relationship
in the equation Y =77.827+502.025X. It is a highly positive regression relation. Here market price
is the dependent variable and ROA is responsible for the changes of market price.
Al Arafa Islami Bank Limited
CorrelationEPS Pearson Correlation -.108
Sig. (2-tailed) .767
PER Pearson Correlation -.278
Sig. (2-tailed) .437DPR (%) Pearson Correlation 0.036
Sig. (2-tailed) .921
ROA (%) Pearson Correlation -.301
Sig. (2-tailed) .398
ROI (%) Pearson Correlation .169
Sig. (2-tailed) .641
ROE (%) Pearson Correlation .124
Sig. (2-tailed) .732
Net profit after tax(mill)
Pearson Correlation -.351
Sig. (2-tailed) .321
Retained earnings Pearson Correlation -.347Sig. (2-tailed) .326
Growth rate(%) Pearson Correlation .132
Sig. (2-tailed) .716
In terms of Al Arafa Islami Bank the correlation between market price and other variables is very
low. The correlation with EPS, PER, ROA, NPAT and Retained earnings is negative. Again DPR,
ROI, ROE and Growth rate are positively correlated with less calculated value.
46Bank Asia
CorrelationEPS Pearson Correlation -.259
Sig. (2-tailed) .620
PER Pearson Correlation .907(*)
Sig. (2-tailed) .013
DPR (%) Pearson Correlation .069
Sig. (2-tailed) .896ROA (%) Pearson Correlation .278
Sig. (2-tailed) .594
8/4/2019 Research Lipi
9/29
ROI (%) Pearson Correlation -.353
Sig. (2-tailed) .493
ROE (%) Pearson Correlation -.131
Sig. (2-tailed) .804
Net profit after tax(mill)
Pearson Correlation -.510
Sig. (2-tailed) .301
Retained earnings Pearson Correlation -.451Sig. (2-tailed) .446
Growth rate(%) Pearson Correlation .003
Sig. (2-tailed) .995
Bank Asia has a mixture of positive and negative correlation. Here PER is highly correlated with
the value of 0.907 in the significant level of 0.05. Whereas EPS, ROI, ROE, NPAT, Retained
earnings are negatively correlated with the market price. And other variables have medium value.
Coefficients
ModelUnstandardized
CoefficientsStandardizedCoefficients t Sig.
B Std. Error Beta
1 (Constant) -265.412 .000 . .
PER 37.981 .000 1.187 . .
EPS 7.657 .000 .526 . .
Net profit aftertax (mill)
-.030 .000 -.089 . .
Retainedearnings
-4.41E-009
.000 -.012 . .
47From the regression coefficient table we can see that there are multiple variables that are
responsible for the changes of market price. In this case the Regression equation can be shown in
the way: Y = -265.412+ 37.981X+ 7.657X2+ (-.030X3) + (-4.41X4). It is a high degree of negative
correlation.
Brac Bank
CorrelationEPS Pearson Correlation -.980
Sig. (2-tailed) .128
PER Pearson Correlation .999(*)
Sig. (2-tailed) .028
DPR (%) Pearson Correlation -.994
Sig. (2-tailed) .068
ROA (%) Pearson Correlation .410
Sig. (2-tailed) .731
ROI (%) Pearson Correlation -.896
Sig. (2-tailed) .293
ROE (%) Pearson Correlation .758
8/4/2019 Research Lipi
10/29
Sig. (2-tailed) .452
Net profit after tax(mill)
Pearson Correlation -.936
Sig. (2-tailed) .230
Retained earnings Pearson Correlation -.941
Sig. (2-tailed) .219
Growth rate(%) Pearson Correlation .961
Sig. (2-tailed) .177
In the table the Brac Bank has a high correlation between market price and PER. It has a value of
0.999 in the significant level of 0.05. The EPS, DPR, ROI, NPAT and Retained earning are weakly
correlated with market price.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) -755.488 .000 . .
PER 61.521 .000 1.272 . .
EPS 12.293 .000 .276 . .
48From the table we can show the regression equation, Y = -755.488+ 61.521X + 12.293X2. Here
regression relationship is positive. PER and EPS are mostly responsible for the movement of share
market price.
Dhaka Bank Limited
CorrelationEPS Pearson Correlation -.239
Sig. (2-tailed) .507
PER Pearson Correlation .899(**)
Sig. (2-tailed) .000
DPR (%) Pearson Correlation -.450
Sig. (2-tailed) .224ROA (%) Pearson Correlation -.246
Sig. (2-tailed) .493
ROI (%) Pearson Correlation -.376
Sig. (2-tailed) .284
ROE (%) Pearson Correlation -.297
Sig. (2-tailed) .405
Net profit after tax(mill)
Pearson Correlation .323
Sig. (2-tailed) .362
Retained earnings Pearson Correlation .418
Sig. (2-tailed) .263
Growth rate(%) Pearson Correlation .397Sig. (2-tailed) .290
8/4/2019 Research Lipi
11/29
In terms of Dhaka Bank PER is highly correlated for the changes of market price. It has a value of
0.899 with the significant level of 0.01. But EPS, DPR, ROA, ROI and ROE have negative
relationship.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) -496.789 88.898 -5.588 .005
PER 59.200 3.844 1.062 15.402 .000
EPS 8.077 1.350 .413 5.981 .004
The Regression equation can be expressed by: Y = -496.789 + 59.200X + 8.007X2. Here PER and
EPS are the mostly coefficient variable with the market price.
49
Dutch Bangla Bank Limited
CorrelationEPS Pearson Correlation .617
Sig. (2-tailed) .077
PER Pearson Correlation .732(*)
Sig. (2-tailed) .025
DPR (%) Pearson Correlation -.836(*)
Sig. (2-tailed) .038
ROA (%) Pearson Correlation -.058
Sig. (2-tailed) .882ROI (%) Pearson Correlation -.538
Sig. (2-tailed) .136
ROE (%) Pearson Correlation -.554
Sig. (2-tailed) .121
Net profit after tax(mill)
Pearson Correlation .410
Sig. (2-tailed) .273
Retained earnings Pearson Correlation .150
Sig. (2-tailed) .700
Growth rate(%) Pearson Correlation .522
Sig. (2-tailed) .149
In this table Dutch Bangla Bank has a highly positive correlation between PER and market price,
which has a value of 0.732 with the significant level of 0.05. They have a high degree of negative
correlation between DPR and market price the value of which is
-0.836, at a significant level of 0.05. ROA, ROI, and ROE are negatively correlated. Other variables
have a positive relationship.
Coefficients
8/4/2019 Research Lipi
12/29
Here both PER and NPAT are responsible for the movements of market price of the share. The
regression equation can be shown as: Y = -984.889 + 107.797X + 4.896 X2. It is a positive
coefficient relationship.
50
Eastern Bank Limited
CorrelationEPS Pearson Correlation .292
Sig. (2-tailed) .445
PER Pearson Correlation .908(**)Sig. (2-tailed) .001
DPR (%) Pearson Correlation .320
Sig. (2-tailed) .401
ROA (%) Pearson Correlation -.024
Sig. (2-tailed) .952
ROI (%) Pearson Correlation -.346
Sig. (2-tailed) .362
ROE (%) Pearson Correlation .013
Sig. (2-tailed) .974
Net profit after tax
(mill)
Pearson Correlation .475
Sig. (2-tailed) .196
Retained earnings Pearson Correlation -.538
Sig. (2-tailed) .135
Growth rate(%) Pearson Correlation -.197
Sig. (2-tailed) .640
From the table of correlation of Eastern Bank Limited the PER is highly correlated with the share
market price which has value of 0.908 in significant level of 0.01. ROA, ROI, Retained earnings,
and growth rate have negative correlation with market price. Other variables are positively
correlated.
Coefficients
ModelUnstandardized
CoefficientsStandardizedCoefficients t Sig.
BStd.
Error Beta
1 (Constant) -984.889 95.047 -10.362 .002
PER 107.797 8.285 .602 13.011 .001
Net profit after tax(mill) 4.896 .435 .521 11.247 .002
8/4/2019 Research Lipi
13/29
ModelUnstandardized
CoefficientsStandardizedCoefficients t Sig.
B Std. Error Beta
1 (Constant) -687.559 52.691 -13.049 .000
PER 51.253 1.478 1.049 34.672 .000
EPS 16.325 1.087 .528 15.024 .000Net profit after tax(mill)
-.242 .077 -.108 -3.153 .034
Three variables PER, EPS and NPAT are co efficiently related with market price. The regression
equation is: Y = -687.559 + 51.253X + 16.325 X 2 + (-.242 X3). It is high degree of negative
relationship.
51EXIM Bank Limited
CorrelationEPS Pearson Correlation .737
Sig. (2-tailed) .095
PER Pearson Correlation .749
Sig. (2-tailed) .087
DPR (%) Pearson Correlation .029
Sig. (2-tailed) .957
ROA (%) Pearson Correlation .350
Sig. (2-tailed) .496
ROI (%) Pearson Correlation .524
Sig. (2-tailed) .286
ROE (%) Pearson Correlation .633
Sig. (2-tailed) .564
Net profit after tax(mill)
Pearson Correlation -.611
Sig. (2-tailed) .198
Retained earnings Pearson Correlation -.479
Sig. (2-tailed) .336
Growth rate(%) Pearson Correlation .544
Sig. (2-tailed) .265
EPS, PER, ROI, ROE, DPR and Growth rate are positively correlated with market price of EXIM
Bank Limited. But NPAT and Retain earning are negatively correlated.
Coefficients
Model Unstandardized
CoefficientsStandardizedCoefficients t Sig.
B Std. Error Beta
1 (Constant) 1646.167 .000 . .
Net profit after tax
(mill)
-1.844 .000 -1.135 . .
ROI (%) -16.828 .000 -.144 . .
8/4/2019 Research Lipi
14/29
From the table we can say that the coefficient relation of market price with PER and ROI is
negatively correlated, which can be expressed with regression equation: Y = 1646.167 + (-1.844X)
+ (-16.828 X2).
52IFIC Bank Limited
CorrelationEPS Pearson Correlation .793(**)
Sig. (2-tailed) .006
PER Pearson Correlation .284
Sig. (2-tailed) .427
DPR (%) Pearson Correlation .767(**)
Sig. (2-tailed) .010
ROA (%) Pearson Correlation .263
Sig. (2-tailed) .463
ROI (%) Pearson Correlation .924(**)
Sig. (2-tailed) .000
N 10
ROE (%) Pearson Correlation .954(**)
Sig. (2-tailed) .000
Net profit after tax(mill)
Pearson Correlation .864(**)
Sig. (2-tailed) .001
Retained earnings Pearson Correlation .856(**)Sig. (2-tailed) .002
Growth rate(%) Pearson Correlation -.094
Sig. (2-tailed) .811
In terms of IFIC Bank Limited it is seen that The EPS, DPR, ROI, ROE and NPAT are highly
correlated with movements of market price. They have the value of 0.793, 0.767, 0.954, 0.864, and
0.856 accordingly with the significant level of 0.01. Only the Growth rate has a negative value of
-0.094.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 102.602 114.288 .898 .399
ROE (%) 52.678 6.596 .949 7.987 .000
In this table the ROA is seen the most constant with market price. So we can show this relationship
in the equation Y =102.602 +52.678X. It is a highly positive regression correlation. Here market
price is the dependent variable and ROA is responsible for the changes of market price.
8/4/2019 Research Lipi
15/29
53Islami Bank Limited
CorrelationEPS Pearson Correlation .266
Sig. (2-tailed) .457
PER Pearson Correlation .155Sig. (2-tailed) .669
DPR (%) Pearson Correlation .535
Sig. (2-tailed) .138
ROA (%) Pearson Correlation -.337
Sig. (2-tailed) .341
ROI (%) Pearson Correlation .168
Sig. (2-tailed) .665
ROE (%) Pearson Correlation -.280
Sig. (2-tailed) .434
Net profit after tax
(mill)
Pearson Correlation -.445
Sig. (2-tailed) .198Retained earnings Pearson Correlation -.384
Sig. (2-tailed) .274
Growth rate(%) Pearson Correlation .194
Sig. (2-tailed) .617
In the table of correlation the EPS, PER, DPR, ROI and Growth rate have positive relationship with
the movements of market price. But ROA, ROE, NPAT and Retained earnings have negative
relation. No variable has highly positive or negative correlation.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 173.890 818.193 .213 .842
DPR (%) 39.476 6.145 .866 6.425 .003
ROA (%) 3796.927 884.342 .579 4.294 .013
In this table of correlation the ROA and DPR is seen the most coefficient with market price. So we
can show this relationship in the regression equation: Y =173.890 + 39.476X + 3796.927X2. It is a
highly positive regression relation.
54Jamuna Bank Limited
Correlation EPS Pearson Correlation .924Sig. (2-tailed) .076
PER Pearson Correlation .067
8/4/2019 Research Lipi
16/29
Sig. (2-tailed) .933
DPR (%) Pearson Correlation -1.000(**)
Sig. (2-tailed) .
ROA (%) Pearson Correlation -.028
Sig. (2-tailed) .972
ROI (%) Pearson Correlation .236
Sig. (2-tailed) .764ROE (%) Pearson Correlation .172
Sig. (2-tailed) .828
Net profit after tax(mill)
Pearson Correlation .621
Sig. (2-tailed) .379
Retained earnings Pearson Correlation .583
Sig. (2-tailed) .417
Growth rate(%) Pearson Correlation -.419
Sig. (2-tailed) .581
Here the DPR has high degree of negative correlation with the movement of market price because it
has a value of -1.00 in the significant level of 0.01. ROA and Growth rate has also negative
calculated value. All other variables have positive correlation with the market price.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) -10.645 .000 . .
EPS 9.384 .000 1.000 . .
In this table the EPS is seen the most correlated with market price. So we can show this relationship
in the equation Y = -10.645 + 9.384X. It is a positive regression relation.
55
Mercantile Bank Limited
CorrelationEPS Pearson Correlation -.282
Sig. (2-tailed) .589
PER Pearson Correlation .862(*)
Sig. (2-tailed) .027
DPR (%) Pearson Correlation -.075
Sig. (2-tailed) .888
ROA (%) Pearson Correlation .348
Sig. (2-tailed) .500
ROI (%) Pearson Correlation .098
Sig. (2-tailed) .854
ROE (%) Pearson Correlation .458
8/4/2019 Research Lipi
17/29
Sig. (2-tailed) .361
Net profit after tax(mill)
Pearson Correlation -.538
Sig. (2-tailed) .271
Retained earnings Pearson Correlation -.117
Sig. (2-tailed) .825
Growth rate(%) Pearson Correlation .180
Sig. (2-tailed) .732
For Mercantile Bank the PER has a highly positive correlation with market price which has a value
of 0.862 in significant level of 0.05. EPS, DPR, NPAT and Growth rate have negative correlation.
Other variables are positively correlated.
Coefficients
Model
Unstandardized
Coefficients
Standardized
Coefficientst Sig.B Std. Error Beta
1 (Constant) 172.376 71.241 2.420 .073
PER 19.478 5.735 .862 3.396 .027
Only PER has the most coefficient regression relation with the market price. This relation can be
shown as the regression equation: Y = 172.376 + 19.478X. It is a highly coefficient relationship.
56
Mutual Trust Bank Limited
CorrelationEPS Pearson Correlation -.326
Sig. (2-tailed) .528
PER Pearson Correlation .644
Sig. (2-tailed) .168
DPR (%) Pearson Correlation .418
Sig. (2-tailed) .410
ROA (%) Pearson Correlation -.244
Sig. (2-tailed) .641
ROI (%) Pearson Correlation -.856
Sig. (2-tailed) .346
ROE (%) Pearson Correlation -.448
Sig. (2-tailed) .450
Net profit after tax(mill)
Pearson Correlation -.757
Sig. (2-tailed) .082
Retained earnings Pearson Correlation -.575
Sig. (2-tailed) .232
Growth rate(%) Pearson Correlation -.589
Sig. (2-tailed) .218
8/4/2019 Research Lipi
18/29
From the table of Mutual Trust Bank we can see that only PER and DPR have positive relationship
with the share market price. All other variables have negative value.
57National Bank Limited
CorrelationEPS Pearson Correlation .567
Sig. (2-tailed) .088
PER Pearson Correlation .769(**)
Sig. (2-tailed) .009
DPR (%) Pearson Correlation .305
Sig. (2-tailed) .391
ROA (%) Pearson Correlation .784(**)
Sig. (2-tailed) .007
ROI (%) Pearson Correlation .747(*)
Sig. (2-tailed) .033
ROE (%) Pearson Correlation .497
Sig. (2-tailed) .144
Net profit after tax(mill)
Pearson Correlation .614
Sig. (2-tailed) .059
Retained earnings Pearson Correlation .307
Sig. (2-tailed) .421
Growth rate(%) Pearson Correlation .756(*)
Sig. (2-tailed) .018
The PER and ROA has a highly positive correlation with the value of 0.769 and 0.784 in significant
level of 0.01. Again ROI and Growth rate is also highly correlated with the value of 0.747 and 0.756
in the significant level of 0.05. There is no variable that has a negative correlation.Coefficients
8/4/2019 Research Lipi
19/29
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 111.289 164.095 .678 .517
ROA (%) 318.317 89.125 .784 3.572 .007
Only ROA has the most coefficient regression relation with the market price. This relation can be
shown as the regression equation: Y = 111.289 + 318.317X. It is a highly coefficient relationship.
58
NCC Bank Limited
CorrelationEPS Pearson Correlation .682(*)
Sig. (2-tailed) .030
PER Pearson Correlation .783(**)
Sig. (2-tailed) .007
DPR (%) Pearson Correlation .755(*)
Sig. (2-tailed) .012
ROA (%) Pearson Correlation .785(**)
Sig. (2-tailed) .007
ROI (%) Pearson Correlation .507
Sig. (2-tailed) .135
ROE (%) Pearson Correlation .519
Sig. (2-tailed) .125
Net profit after tax(mill)
Pearson Correlation .730(*)
Sig. (2-tailed) .017
Retained earnings Pearson Correlation .650(*)
Sig. (2-tailed) .042
Growth rate (%) Pearson Correlation .657
Sig. (2-tailed) .055
From the table of EPS, DPR, NPAT and Retained earnings are highly correlated with the value of
0.682, 0.755, 0.730, and 0.650 accordingly in the significant level of 0.05. The PER and ROA are
also highly significant with the value of 0.783 and 0.785 in level of significance 0.01.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 85.802 84.136 1.020 .342
DPR (%) 5.777 1.690 .791 3.418 .011
Only DPR has the most coefficient regression relation with the market price. This relation can be
shown as the regression equation: Y = 85.802 + 5.777X. It is a highly coefficient relationship.
8/4/2019 Research Lipi
20/29
59One Bank Limited
CorrelationEPS Pearson Correlation -.194
Sig. (2-tailed) .713
PER Pearson Correlation .703
Sig. (2-tailed) .119
DPR (%) Pearson Correlation .782
Sig. (2-tailed) .118
ROA (%) Pearson Correlation .535
Sig. (2-tailed) .274
ROI (%) Pearson Correlation -.102
Sig. (2-tailed) .848
ROE (%) Pearson Correlation -.030Sig. (2-tailed) .954
Net profit after tax(mill)
Pearson Correlation .197
Sig. (2-tailed) .708
Retained earnings Pearson Correlation -.339
Sig. (2-tailed) .511
Growth rate(%) Pearson Correlation .271
Sig. (2-tailed) .604
Correlation table of One Bank Limited shows that the EPS, ROI, ROE and Retained earnings has
negative relationship with market price whereas other variable has positive relation. PER and DPRare highly correlated.
60
Prime Bank Limited
Correlation
8/4/2019 Research Lipi
21/29
EPS Pearson Correlation -.258
Sig. (2-tailed) .472
PER Pearson Correlation .586
Sig. (2-tailed) .075
DPR (%) Pearson Correlation .350
Sig. (2-tailed) .321
ROA (%) Pearson Correlation -.708(*)Sig. (2-tailed) .022
ROI (%) Pearson Correlation .174
Sig. (2-tailed) .632
ROE (%) Pearson Correlation .584
Sig. (2-tailed) .076
Net profit after tax(mill)
Pearson Correlation .451
Sig. (2-tailed) .191
Retained earnings Pearson Correlation .279
Sig. (2-tailed) .504
Growth rate(%) Pearson Correlation -.215
Sig. (2-tailed) .578
Prime Banks Share market price has negative correlation with EPS, ROA and growth rate from
which ROA is high degree of negative correlation with value of -0.708 in the significant level of
0.05. All other variables have positive relation but not very high.
Coefficients
Model
Unstandardized
Coefficients
Standardized
Coefficients
T Sig.B Std. Error Beta
1 (Constant) 898.586 128.162 7.011 .000
ROA (%) -115.528 40.783 -.708 -2.833 .022
ROA has a coefficient relation with the market price which can be shown as the regression
equation: Y = 898.586 + (-115.528X).
61
Pubali Bank Limited
CorrelationEPS Pearson Correlation .901(*)
Sig. (2-tailed) .014
PER Pearson Correlation .426
Sig. (2-tailed) .400DPR (%) Pearson Correlation .826(*)
Sig. (2-tailed) .043
8/4/2019 Research Lipi
22/29
ROA (%) Pearson Correlation -.585
Sig. (2-tailed) .223
ROI (%) Pearson Correlation -.010
Sig. (2-tailed) .985
ROE (%) Pearson Correlation -.256
Sig. (2-tailed) .625
Net profit after tax(mill) Pearson Correlation -.693Sig. (2-tailed) .127
Retained earnings Pearson Correlation -.915(*)
Sig. (2-tailed) .029
Growth rate(%) Pearson Correlation .988(**)
Sig. (2-tailed) .002
Highly positive correlation can be seen in the table for EPS and DPR with the market price. They
have value of 0.901 and 0.826 in the significant level of 0.05. Again Growth rate is also highly
significant with the value of 0.988 in a significant level of 0.01. Retained Earnings is negatively
correlated which has a value of -0.915 at a significant level of 0.05. ROA, ROI, ROE and NPAT are
also negatively correlated whereas PER is positively correlated.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients t Sig.
B Std. Error Beta
1 (Constant) 545.678 67.551 8.078 .004
Growth rate(%) 5.027 .448 .988 11.215 .002
Here the regression equation can be shown as: Y = 545.678 + 5.027X, where the independentvariable is only the Growth Rate.
62
Social Investment Bank Limited
CorrelationEPS Pearson Correlation .827(*)
Sig. (2-tailed) .042
PER Pearson Correlation .300
Sig. (2-tailed) .563
DPR (%) Pearson Correlation -.836
Sig. (2-tailed) .164
ROA (%) Pearson Correlation -.682
Sig. (2-tailed) .135
ROI (%) Pearson Correlation -.539
Sig. (2-tailed) .638
ROE (%) Pearson Correlation .774
Sig. (2-tailed) .436
Net profit after tax Pearson Correlation -.620
8/4/2019 Research Lipi
23/29
(mill) Sig. (2-tailed) .189
Retained earnings Pearson Correlation -.615
Sig. (2-tailed) .194
Growth rate (%) Pearson Correlation -.371
Sig. (2-tailed) .469
In this table EPS has a highly significant relationship that has a value of 0.827 at a significant levelof 0.05. PER and ROE also have a positive relation. But DPR, ROA, ROI, NPAT, Retained earnings
and Growth rate have negative correlation.
63SouthEast Bank Limited
CorrelationEPS Pearson Correlation -.423
Sig. (2-tailed) .224
PER Pearson Correlation .894(**)
Sig. (2-tailed) .000
DPR (%) Pearson Correlation .402
Sig. (2-tailed) .250
ROA (%) Pearson Correlation -.207
Sig. (2-tailed) .567
ROI (%) Pearson Correlation -.448
Sig. (2-tailed) .195
ROE (%) Pearson Correlation -.311
Sig. (2-tailed) .382
Net profit after tax(mill)
Pearson Correlation .109
Sig. (2-tailed) .764
Retained earnings Pearson Correlation .198
Sig. (2-tailed) .584
Growth rate(%) Pearson Correlation .394
Sig. (2-tailed).294
In the table of correlation of SouthEast Bank Limited the PER has the highest positive correlation
8/4/2019 Research Lipi
24/29
with the market price which has value of 0.894 at a significant level of 0.01. Market Price has
negative correlation with EPS, ROA, ROI and ROE. It has positive correlation with DPR, NPAT,
Retained earnings and Growth rate.
Coefficients
Model
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
B Std. Error Beta
1 (Constant) -188.558 74.096 -2.545 .052
PER 40.091 3.328 1.213 12.047 .000
ROA (%) 215.295 40.532 .539 5.312 .003
Net profit aftertax (mill)
-.071 .023 -.255 -3.039 .029
From the table we can say that the market price movement is co efficiently depended on PER, ROA
and NPAT which can be shown as: Y = -188.558 + 40.091X + 215.295X2 +
(-0.071X3).
64Standard Bank Limited
CorrelationEPS Pearson Correlation .284
Sig. (2-tailed) .585
PER Pearson Correlation .545
Sig. (2-tailed) .263DPR (%) Pearson Correlation -.678
Sig. (2-tailed) .139
ROA (%) Pearson Correlation .046
Sig. (2-tailed) .941
ROI (%) Pearson Correlation .493
Sig. (2-tailed) .321
ROE (%) Pearson Correlation .233
Sig. (2-tailed) .657
Net profit after tax(mill)
Pearson Correlation -.554
Sig. (2-tailed) .254
Retained earnings Pearson Correlation -.580
Sig. (2-tailed) .227
Growth rate(%) Pearson Correlation -.171
Sig. (2-tailed) .746
Correlation table of Standard Bank Limited shows that EPS, PER, ROA, ROI, ROE has positive
correlation with the market price. But DPR, NPAT, Retained earnings and growth rate are
negatively correlated.
Coefficients
Model UnstandardizedCoefficients
StandardizedCoefficients
t Sig.
8/4/2019 Research Lipi
25/29
B Std. Error Beta
1 (Constant) -28.276 47.913 -.590 .597
PER 34.187 4.487 .975 7.620 .005
Only PER has the most coefficient regression relation with the market price. This relation can be
shown as the regression equation: Y = -28.276 + 34.187X. It is negative coefficient relationship.
65City Bank
CorrelationEPS Pearson Correlation .569
Sig. (2-tailed) .086
PER Pearson Correlation -.233
Sig. (2-tailed) .516
DPR (%) Pearson Correlation .310
Sig. (2-tailed) .550
ROA (%) Pearson Correlation -.249
Sig. (2-tailed) .488
ROI (%) Pearson Correlation .710(*)
Sig. (2-tailed) .021
ROE (%) Pearson Correlation -.375
Sig. (2-tailed) .286
Net profit after tax(mill)
Pearson Correlation .774(**)
Sig. (2-tailed) .009
Retained earnings Pearson Correlation .160
Sig. (2-tailed) .705
Growth rate(%) Pearson Correlation .524
Sig. (2-tailed) .148
ROI is highly correlated with a value of 0.710 at significant level of 0.05 and NPAT is highly
correlated with a value of 0.774 at a significant level of 0.01. PER, ROA and ROE has negativevalue whereas EPS, DPR, Retained earnings and growth rate have positive calculated value.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 419.509 91.508 4.584 .019
EPS 5.339 1.629 .884 3.277 .047
EPS is highly coefficient with the market price which can be shown as the equation of regression: Y
8/4/2019 Research Lipi
26/29
= 419.509 + 5.339X.
66
United Commercial Bank Limited
CorrelationEPS Pearson Correlation .850(*)
Sig. (2-tailed) .015
PER Pearson Correlation .696
Sig. (2-tailed) .082
DPR (%) Pearson Correlation .(a)
Sig. (2-tailed) .
ROA (%) Pearson Correlation .747
Sig. (2-tailed) .054
ROI (%) Pearson Correlation .572
Sig. (2-tailed) .179
ROE (%) Pearson Correlation .464
Sig. (2-tailed) .294
Net profit after tax(mill)
Pearson Correlation .919(**)
Sig. (2-tailed) .003
Retained earnings Pearson Correlation .878(**)
Sig. (2-tailed) .009
Growth rate(%) Pearson Correlation -.202
Sig. (2-tailed).701
EPS is highly correlated which has a value of 0.850 at a significant level of 0.05. NPAT and
Retained earnings are highly correlated with value of 0.919 and 0.878 at significant level of 0.01.
Growth rate has negative correlation with the market price. All other variables are positively
correlated.
8/4/2019 Research Lipi
27/29
67
Coefficients
ModelUnstandardized
CoefficientsStandardizedCoefficients t Sig.
B Std. Error Beta1 (Constant) -966.331 370.917 -2.605 .080
Net profit after tax(mill)
3.917 .605 .774 6.473 .007
PER 101.942 30.443 .400 3.349 .044
Co efficiency of variables is shown above. It can be expressed by the regression equation: Y =
-966.331 + 3.917X + 101.942X2. It showsa positive relation.
Uttara Bank Limited
CorrelationEPS Pearson Correlation .330
Sig. (2-tailed) .523
PER Pearson Correlation .793
Sig. (2-tailed) .060
DPR (%) Pearson Correlation .458
Sig. (2-tailed) .438
ROA (%) Pearson Correlation -.417
Sig. (2-tailed) .411
ROI (%) Pearson Correlation -.464
Sig. (2-tailed) .354ROE (%) Pearson Correlation -.455
Sig. (2-tailed) .365
Net profit after tax(mill)
Pearson Correlation -.581
Sig. (2-tailed) .227
Retained earnings Pearson Correlation -.513
Sig. (2-tailed) .298
Growth rate(%) Pearson Correlation -.023
Sig. (2-tailed) .965
Correlation table shows that EPS, PER and DPR has positive correlation among them PER is highly
correlated. All other variables are negatively correlated with market price.
68
Coefficients
Model UnstandardizedCoefficients
StandardizedCoefficients
t Sig.
8/4/2019 Research Lipi
28/29
B Std. Error Beta
1 (Constant) 973.847 273.616 3.559 .038
PER 72.665 9.457 .976 7.684 .005
PER has the most coefficient regression relation with the market price. This relation can be shown
as the regression equation: Y = 973.847 + 72.665X. It is a positive coefficient relationship.
Rupali Bank Limited
CorrelationEPS Pearson Correlation -.836(*)
Sig. (2-tailed) .038
PER Pearson Correlation -.022
Sig. (2-tailed) .967
DPR (%) Pearson Correlation .(a)
Sig. (2-tailed) .
ROA (%) Pearson Correlation -.869(*)Sig. (2-tailed) .024
ROI (%) Pearson Correlation -.100
Sig. (2-tailed) .851
ROE (%) Pearson Correlation .903(*)
Sig. (2-tailed) .036
Net profit after tax(mill)
Pearson Correlation -.836(*)
Sig. (2-tailed) .038
Retained earnings Pearson Correlation -.851(*)
Sig. (2-tailed) .032
Growth rate (%) Pearson Correlation -.867
Sig. (2-tailed) .057
All the variables have negative correlation with the market price. EPS, ROA, ROE, NPAT and
growth rate are highly negative with value of -0.836, -0.869, -0.903, -0.836, -0.851 at the significant
level of 0.05.
69Shahjalal Islami Bank Limited
CorrelationEPS Pearson Correlation .959
Sig. (2-tailed) .182
PER Pearson Correlation -.528
Sig. (2-tailed) .646
DPR (%) Pearson Correlation -.816Sig. (2-tailed) .392
ROA (%) Pearson Correlation -.435
8/4/2019 Research Lipi
29/29
Sig. (2-tailed) .714
ROI (%) Pearson Correlation -.980
Sig. (2-tailed) .128
ROE (%) Pearson Correlation -.362
Sig. (2-tailed) .764
Net profit after tax(mill)
Pearson Correlation -1.000(**)
Sig. (2-tailed) .Retained earnings Pearson Correlation .355
Sig. (2-tailed) .769
Growth rate(%) Pearson Correlation .610
Sig. (2-tailed) .582
From the Correlation table it is seen that NPAT has highly negative correlation with the market price
with a value of -1.00 at a significant level of 0.01. EPS has highly positive correlation and Retained
earnings and Growth rate are also positively correlated. PER, DPR, ROA, ROI and ROE have
negative correlation.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) -34.150 .000 . .
EPS 11.575 .000 1.000 . .
EPS is highly coefficient with the market price which can be shown as the equation of regression: Y
= -34.150 + 11.575X. It is a positive correlation