Research Lipi

8/4/2019 Research Lipi

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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.asp


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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:
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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.

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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/


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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.

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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


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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.

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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_value


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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
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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


DPR (%) Pearson Correlation .305


ROA (%) Pearson Correlation .794(**)


ROI (%) Pearson Correlation .765(*)


ROE (%) Pearson Correlation .549


Net profit after tax(mill)

Pearson Correlation .649(*)


Retained earnings Pearson Correlation .457


Growth rate(%) Pearson Correlation .284


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)


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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) .437DPR (%) Pearson Correlation 0.036


ROA (%) Pearson Correlation -.301


ROI (%) Pearson Correlation .169





Pearson Correlation -.351


Retained earnings Pearson Correlation -.347Sig. (2-tailed) .326



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



PER Pearson Correlation .907(*)



Sig. (2-tailed) .896ROA (%) Pearson Correlation .278



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ROI (%) Pearson Correlation -.353


ROE (%) Pearson Correlation -.131





Retained earnings Pearson Correlation -.451Sig. (2-tailed) .446



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





DPR (%) Pearson Correlation -.994


ROA (%) Pearson Correlation .410






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Retained earnings Pearson Correlation -.941




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




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



PER Pearson Correlation .899(**)



Sig. (2-tailed) .224ROA (%) Pearson Correlation -.246







Pearson Correlation .323




Growth rate(%) Pearson Correlation .397Sig. (2-tailed) .290


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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




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.

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Dutch Bangla Bank Limited





DPR (%) Pearson Correlation -.836(*)



Sig. (2-tailed) .882ROI (%) Pearson Correlation -.538











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


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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.

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Eastern Bank Limited



PER Pearson Correlation .908(**)Sig. (2-tailed) .001









Net profit after tax

(mill)





Growth rate(%) Pearson Correlation -.197


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


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


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ModelUnstandardized


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



PER Pearson Correlation .749

















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


B Std. Error Beta

1 (Constant) 1646.167 .000 . .


(mill)

-1.844 .000 -1.135 . .

ROI (%) -16.828 .000 -.144 . .


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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(**)




DPR (%) Pearson Correlation .767(**)




ROI (%) Pearson Correlation .924(**)


N 10

ROE (%) Pearson Correlation .954(**)



Pearson Correlation .864(**)


Retained earnings Pearson Correlation .856(**)Sig. (2-tailed) .002



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




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.


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53Islami Bank Limited



PER Pearson Correlation .155Sig. (2-tailed) .669










(mill)


Sig. (2-tailed) .198Retained earnings Pearson Correlation -.384




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




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



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DPR (%) Pearson Correlation -1.000(**)

Sig. (2-tailed) .




Sig. (2-tailed) .764ROE (%) Pearson Correlation .172









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




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.

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Mercantile Bank Limited













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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.

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Mutual Trust Bank Limited





















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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


















Growth rate(%) Pearson Correlation .756(*)


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


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Model




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


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NCC Bank Limited

CorrelationEPS Pearson Correlation .682(*)




DPR (%) Pearson Correlation .755(*)









Pearson Correlation .730(*)


Retained earnings Pearson Correlation .650(*)


Growth rate (%) Pearson Correlation .657


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




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



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59One Bank Limited











ROE (%) Pearson Correlation -.030Sig. (2-tailed) .954








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.

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Prime Bank Limited

Correlation


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EPS Pearson Correlation -.258






ROA (%) Pearson Correlation -.708(*)Sig. (2-tailed) .022












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




Sig. (2-tailed) .400DPR (%) Pearson Correlation .826(*)



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Net profit after tax(mill) Pearson Correlation -.693Sig. (2-tailed) .127

Retained earnings Pearson Correlation -.915(*)


Growth rate(%) Pearson Correlation .988(**)


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


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













Net profit after tax Pearson Correlation -.620


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(mill) Sig. (2-tailed) .189



Growth rate (%) Pearson Correlation -.371


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



















Sig. (2-tailed).294

In the table of correlation of SouthEast Bank Limited the PER has the highest positive correlation


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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




Sig. (2-tailed) .263DPR (%) Pearson Correlation -.678















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


t Sig.


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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




















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




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


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= 419.509 + 5.339X.

66

United Commercial Bank Limited





DPR (%) Pearson Correlation .(a)

Sig. (2-tailed) .










Retained earnings Pearson Correlation .878(**)



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.


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67

Coefficients

ModelUnstandardized


B Std. Error Beta1 (Constant) -966.331 370.917 -2.605 .080


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










Sig. (2-tailed) .354ROE (%) Pearson Correlation -.455









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


t Sig.


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(*)




DPR (%) Pearson Correlation .(a)

Sig. (2-tailed) .

ROA (%) Pearson Correlation -.869(*)Sig. (2-tailed) .024



ROE (%) Pearson Correlation .903(*)



Pearson Correlation -.836(*)


Retained earnings Pearson Correlation -.851(*)


Growth rate (%) Pearson Correlation -.867


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





DPR (%) Pearson Correlation -.816Sig. (2-tailed) .392



29/29







Pearson Correlation -1.000(**)

Sig. (2-tailed) .Retained earnings Pearson Correlation .355




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




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

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