Evaluation Of Share Price Determination And Corporate Firm Characteristics

The purpose of this study is to examine share price determination factors and the relationship of traits of the corporate firm to share price undertaking. Abstract This paper investigates the share price fluctuations in relation to the firm size, profitability, capital structure & market performance key corporate characteristics. The qualitative research in this study is based on secondary data analysis of publicly listed companies over a defined time frame. Descriptive statistics, correlation, and regression model were performed on the data to investigate the effects of corporate characteristics on share price movement behaviors. The results show the extent to which the firm size (total assets), the firm profitability (Return on Assets and Return on Equity) and the firm market capitalization significantly affects the share price performance. Larger companies or those that achieve higher profits are usually able to charge higher share prices. A positive correlation between debt-equity ratio and share price, albeit lower than that for profit and size, indicated that less profitable firms tend to have a higher leverage, thus do show a slight increase in terms of stock price. Other factors like P/E ratio, dividend yield, and EPS also had a positive effect on share price but on a lower scale. The study also concludes that profitability and firm size are the leading determinants of share price, while other factors such as leverage and dividend yield can only be expected to have a secondary impact. Theoretical and practical implications are drawn from these findings for corporate managers and investors. Corporate managers need to work on increasing profitability, managing capital structure rationally, and looking for strategic growth opportunities. The most crucial decision for investors: invest in firms with profitability measures, and larger firms. Through connecting features of a corporation to its stock market standing, this research complements previous work on share price dynamics. The study provides a base for future research on the determinants of share price, particularly considering macroeconomic variables, investor sentiment, as well as industry-specific factors, alongside the study of corporate value, especially in the context of digital transformation.

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