AN EMPIRICAL STUDY OF THE RELATIONSHIP BETWEEN PROFITABILITY RATIOS AND MARKET SHARE PRICES OF PUBLICLY TRADED BANKING FINANCIAL INSTITUTIONS IN GHANA

Osman Issah, Iddrisu Ngmenipuo
2015 International Journal of Economics, Commerce and Management United Kingdom   unpublished
The purpose of the paper was to investigate empirically whether ROA, ROE, and ROI together explain variations in the market prices per share of publicly traded banking financial institutions in Ghana for the period 2009-2013. We found a significant linear relationship between the ROA, ROE, and ROI together the market prices per share, with the ROE contributing more than the ROA. These findings are consistent with both empirical and theoretical literature which posit a positive linear
more » ... e linear relationship. The findings have important implications for investors, bank senior management as well as the banks regulator to improve the quality of reporting by banks quoted on the exchange.
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