Does Price to Book Value Predict Stock Price? Evidence from Nigerian Firms
Journal Title: International Journal of Computational Engineering and Management IJCEM - Year 2016, Vol 19, Issue 1
Abstract
The value a company is usually ascertained based on the markets values of its equity in the markets. Share prices of a company inform the public on the prospect of such stock hence, decisions on purchase or sales is determined. Price to book value multiple is one of the valuation multiples used to predict stock price of companies. However, arguments exist on whether the P/B multiple can be used to predict stock price of Nigerian firms. This study achieve this objective by examining effect of P/B multiple on stock price of 100 firms listed on the Nigerian Stock Exchange (NSE) covering 2009 to 2013 period data. Evidence from the ordinary least square (OLS) results reveals a significant positive relationship between price to book value and stock price of Nigerian listed firms. Therefore, we concludes that price-book value predict stock price of Nigerian listed firms. Hence, recommends the application of P/B value multiple in the prediction of future stock price.
Authors and Affiliations
Isah Shittu, Ayoib Che Ahmad, Zuaini Ishak
Keywords
Related Articles
- EP ID EP164311
- DOI -
- Views 68
- Downloads 0
Designing of 1V Rail to Rail Operational Amplifier
At low voltage, the input common mode voltage of Operational amplifier is limited which restricts its use as a buffer. The paper deals with designing a rail to rail amplifier. The paper presents a 1V...
Work-Life Conflicts of Working Couples and Their Management: A Theoretical Framework
In contemporary workplaces there exist many employed parents who are endeavoring to balance participation between the two central life domains i.e. work and family. For parents living in dual-earner families, simultaneou...
Opportunistic use of Accrual Earnings in Financial Reporting: A Study of BSE Listed Firmsin India
The study attempted to explore the role of discretionary accrual to conceal the actual earnings as a part of misapplication of flexible area in financial estimate in Indian BSE listed companies. As accruals have always p...
Study of Nonlinearity in CO-OFDM for Single Channel and WDM System
In this paper an attempt is made to study the theoretical fundamentals for Coherent optical orthogonal frequency division multiplexing (CO-OFDM) for high speed, long haul optical transmission and investigated the nonline...
Reconstruction of Perturbed Data using K-Means
A key element in preserving privacy and confidentiality of sensitive data is the ability to evaluate the extent of all potential disclosure for such data. In other words, we need to be able to answer to what extent confi...