A Research Report Submitted to School of Business (SOB) in Fulfillment of the Requirements for Award of Bachelor of Accounting and Finance in Business Sector (BAF-BS) of Mzumbe University
This study assessed the influenceof financial performance of public listed company on share price by use the case study of Commercial bank listed in DSE. The study is focused on the identification of variable that influence the share price and analysis of the relationship of these variables with the market price per share of the commercial banks. Hence, three listed commercial banks are taken in consideration for the purpose. Market price of the sample banks has been analytically tested here to compare with other financial indicator like EPS, DPR and ROE. For this purpose, the research design used on this research is case study strategy whereby a single unit was selected therefore secondary data was gathered from different sourcesdata collection methods includes documentary review and audited financial statementand data were analyzed by usingdifferent financial tools as well as statistical tools have been used for analysisalso Microsoft Exceland STATAhave been used for analysis. The study is based on secondary data analysis. The secondary data are collected from the audited annual reports of the banks available in their websites and DSE website. The major findings from the data analysis is presented below:The data were analyzed using multiple linear regression methods, inwhich at the 0.05 level of significance, the results showed that Earningsper share(EPS)and Return on Equity (ROE)significantly influencesharepricewhile Return on Equity (ROE) has got significant negative influenceon stock returns. When Return on Equity (ROE) willincrease, than all those investors who wants short term gain and conscious for dividend sell theirstock in to the market due to which in near future the stock returns of the company will bedecrease due to excess supply of stocks, Meanwhile, another variable Dividend payout ratio (DPR)have insignificantly influence on share price hence have no effect on shareprices. These results indicate that the share price reflects the Return on Equity (ROE) and Earning per share (EPS) of the company's shares