Price to Book Value Ratio and Financial Statement Variables (An Empirical Study of Companies Quoted At Nairobi Securities Exchange, Kenya

Simple item page
dc.contributor.authorMarangu, Kenneth
dc.contributor.authorJagongo, A. O.
dc.date.accessioned2015-02-05T06:18:49Z
dc.date.available2015-02-05T06:18:49Z
dc.date.issued2015
dc.description.abstractThis study set out to establish the relationship between price to book value ratio and the following financial statement variables: dividend payout ratio, return on total assets, return on equity, return per share, dividend per share and growth rate of earnings after tax for companies quoted at the Nairobi Securities Exchange (NSE). This is because not much is known about the factors that impact on the price to book value ratio since most of the studies on this ratio have been carried out in developed capital markets and their applicability in developing capital markets such as the NSE has not been empirically tested. Companies that comprise the NSE 20 share index were used to predict the price to book value ratio. The data collected was summarized and multiple linear regression analysis was used to estimate the price to book value ratios. Price to book value ratio was the dependent variable and proxies for dividend payout ratio, return on total assets, return on equity, return per share, dividend per share and growth rate of earnings after tax were the independent variables. This study concluded that there was a statistically significant relationship between price to book value ratio and the following financial statement variables: return on total assets, return on equity, return per share and dividend per share at the NSE, Kenya. In addition, there was no statistically significant relationship between price to book value ratio and the following financial statement variables: dividend payout ratio and growth rate in earnings after tax at the NSE, Kenya. The best predictor variables of the price to book value ratio were return on total assets, return on equity and dividend per share. This study also concluded that return on total assets, return on equity and return per share all had a positive relationship (positively affected) the price to book value ratio while dividend per share had a negative relationship (negatively affected) the price to book value ratio.en_US
dc.identifier.citationGlobal Journal of Commerce and Management Perspective, Vol. 3 (6).en_US
dc.identifier.issn2319-7285
dc.identifier.urihttp://www.ku.ac.ke/schools/business/images/stories/docs/price_book_ratio.pdf
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/12137
dc.language.isoenen_US
dc.publisherGlobal Institute of Research and Educationen_US
dc.subjectPrice to book value ratioen_US
dc.subjectfinancial statement variablesen_US
dc.subjectdividend payout ratioen_US
dc.subjectreturn on total assetsen_US
dc.subjectreturn on equityen_US
dc.subjectreturn per shareen_US
dc.subjectdividend per shareen_US
dc.subjectgrowth rate of earnings after taxen_US
dc.titlePrice to Book Value Ratio and Financial Statement Variables (An Empirical Study of Companies Quoted At Nairobi Securities Exchange, Kenyaen_US
dc.typeArticleen_US
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
Price to Book Value Ratio and Financial Statement......pdf
Size:
536.45 KB
Format:
Adobe Portable Document Format
Description:
Full text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Item-specific license agreed upon to submission
Description:
Download
Collections
RP-Accounting and Finance Department