Volume : V, Issue : V, May - 2016

Impact of Fundamental factors on Share Price Movements

S. Sundaram, Dr. M. Rajesh

Abstract :

 The determinants of share prices are frequently a topic of debate. Economists and Investors hold different view as far as the pricing of a share is concerned. In an efficient market, share prices would be determined primarily by fundamental factors such as Dividend Per Share, Earnings Per Share, Dividend Payout ratio, Dividend Yield, Net Worth and Size of the firm etc. To estimate the future share prices, fundamental analysts use stock valuation ratios to derive a share‘s current fair value and estimate future value. If fair value is not equal to the current share price, fundamental analysts believe that the stock is either over or under valued and the market price will ultimately drop towards fair value. Fundamentalists do not pay attention to the advice of the random walkers and believe that markets are weak form efficient. As a result of believing that prices do not accurately reflect all available information, fundamental analysts look to capitalize on perceived price discrepancies. Understanding the impact of various fundamental variables on share price is very much helpful to investors as it will help them in taking profitable investment decisions. In the present study, an attempt has been made to study the impact of selected accounting variables on the equity prices of listed companies in Bombay Stock Exchange.

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Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

S.Sundaram, Dr.M.Rajesh Impact of Fundamental factors on Share Price Movements International Journal of Scientific Research, Vol : 5, Issue : 5 MAY 2016

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