Tag Archives: Shares

Financial Accounting Information Relevance and Share Prices: A Case Study of Unilever Nigeria PLC Listed on the NSE (Published)

This study examined financial accounting information relevance and share price association using Unilever Nigeria PLC, a multinational company listed on the Nigerian Stock Exchange under the consumer goods sector as a case study. The study adopted market price per share (MPS) as proxy for share price and the dependent variable, while earnings per share and dividend per share were the financial accounting data used as the independent variables. Secondary data was collected through content analysis of the published annual financial statements of Unilever Nigeria PLC for the period 2009 to 2018 and the Nigerian Stock Exchange fact book. The study employed descriptive statistics and linear regression analysis based on the ordinary least squares method as techniques for data analysis. The results of the study revealed that earnings per share (EPS) and dividend per share are not significantly related to market price per share (MPS). Based on the findings, the study concluded that financial accounting information (EPS and DPS) are not relevant for determining the market price of shares. This implies that EPS and DPS are not relevant for determining the market price of Unilever shares. The study recommended among others, that more inclusive further studies should be conducted to be able to make general inference on the subject concerning the consumer goods sector in Nigeria.

Keywords: Accounting information, Earnings, Market price, Relevance, Shares, dividend

DOES EARNING PER SHARE DETERMINE MARKET PRICE OF ORDINARY SHARES? EVIDENCE FROM NIGERIA BANKING SECTOR (2000 – 2013) (Published)

The study aims at examining the magnitude and nature of the relationship between earnings per share and market price of ordinary shares in Nigeria banking industry from 2004 to 2013. In addition, it aims at ascertaining the impact of earnings per share on prices of ordinary shares in Nigerian banking industry. Ordinary least squares method in the form of multiple regression was applied in the analysis. Stationarity test was conducted using the Augmented Dickey- Fuller (ADF) and Phillip Perrons (PP) tests. The result reveals that earnings per share significantly and positively influence the market price of ordinary shares; with a strong and positive association too. Earnings per share also granger causes market price of ordinary shares and these characteristics are sustainable in the long run in Nigerian banking sector. The implication of the findings is that an increase in earnings has the tendency of increasing significantly the market price of shares and earnings per share is one of the key factors responsible for fluctuations in market price of ordinary shares in Nigerian banking sector. Therefore, it is pertinent for banks targeting the enhancement of their equity price to adopt workable strategies towards attracting more deposit, increasing their lending, reducing their expenditure profile and opening up other investment avenues to improve upon their earnings.

Keywords: Banks’, Earnings, Granger, Nigeria, Regression, Shares

DOES EARNING PER SHARE DETERMINE MARKET PRICE OF ORDINARY SHARES? EVIDENCE FROM NIGERIA BANKING SECTOR (2000 – 2013). (Published)

The study aims at examining the magnitude and nature of the relationship between earnings per share and market price of ordinary shares in Nigeria banking industry from 2004 to 2013. In addition, it aims at ascertaining the impact of earnings per share on prices of ordinary shares in Nigerian banking industry. Ordinary least squares method in the form of multiple regression was applied in the analysis. Stationarity test was conducted using the Augmented Dickey- Fuller (ADF) and Phillip Perrons (PP) tests. The result reveals that earnings per share significantly and positively influence the market price of ordinary shares; with a strong and positive association too. Earnings per share also granger causes market price of ordinary shares and these characteristics are sustainable in the long run in Nigerian banking sector. The implication of the findings is that an increase in earnings has the tendency of increasing significantly the market price of shares and earnings per share is one of the key factors responsible for fluctuations in market price of ordinary shares in Nigerian banking sector. Therefore, it is pertinent for banks targeting the enhancement of their equity price to adopt workable strategies towards attracting more deposit, increasing their lending, reducing their expenditure profile and opening up other investment avenues to improve upon their earnings.

Keywords: Banks’, Earnings, Granger, Nigeria, Regression, Shares