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Role of Accounting Information in Assessing Stock Prices in Bangladesh

Nazmul Hassan, () and Hasan Md. Mahmood Ul Haque ()
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Nazmul Hassan,: Department of Business Administration, East West University.
Hasan Md. Mahmood Ul Haque: School of Business Administration, Independent University, Bangladesh.

International Journal of Business and Social Research, 2017, vol. 7, issue 10, 18-25

Abstract: This paper seeks to explore the relationship between share prices and the value-relevance of accounting information. The basic Ohlson (1995) valuation model has been used to conduct the research using a sample of 93 companies from six broad industries listed on the Dhaka Stock Exchange (DSE), Bangladesh. The adjusted (R²) and estimated regression coefficients of accounting variables are tested in this model. Results report that both Earnings per Share (EPS) and Book Value (BV) have influential power in determining share prices. But, results of the individual effect of EPS and BV to determining share price indicate that the EPS played an increasingly considerable role in projecting share prices than that of BV. Thus, EPS has become more informative to equity investors in predicting the share prices.

Keywords: Book Value (BV); Earnings per Share (EPS); Value Relevance. (search for similar items in EconPapers)
JEL-codes: D8 E20 E44 (search for similar items in EconPapers)
Date: 2017
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