Value Relevance of Accounting Information of Listed Public Sector Banks in Bombay Stock Exchange.

Abstract

This study aimed in providing empirical evidence related to value relevance of earnings per share, book value per share, return on equity and assets turnover ratio on the share price of public sector banks listed in Bombay stock exchange (S&P BSE 500). Study based on the uses of secondary data. Two panel data techniques (i.e. Fixed effect model and Random effect model) employed in examine the value relevance of accounting information in public sector banks stock. Earnings per share reported to have positive relationship and statistically significant with share price. While book value per share, return on equity and assets turnover ratio found to have negative relationship and statistically insignificant with share price. On the other hand earnings per share, book value per share and return on equity found to have positive correlation with share but the positive correlation between return on equity and share price reported to be very low.

Keywords: Accounting information, Bombay stock exchange, Share price, Value relevance.