FINANCIAL RATIOS AND STOCK PRICES ON DEVELOPED CAPITAL MARKETS
FINANCIAL RATIOS AND STOCK PRICES ON DEVELOPED CAPITAL MARKETS
Author(s): Otilia Şărămăt, Bogdan Dima, Carmen Angyal, Dima Ştefana MariaSubject(s): Economy
Published by: Editura Universităţii Vasile Goldiş
Keywords: financial ratios; financial assets’ valuation; European capital markets; S&P 500 market.
Summary/Abstract: This study empirically tests for the relevance of a set of financial ratios designed to capture issuers’ financial performance for the dynamics of stock prices, on a dataset of quarterly values for 495 trading quotes from major European capital markets as well as from S&P 500 market covering a time span between 2003/1 and 2011/1. The research hypothesis is that financial ratios reflecting issuers’ financial health matter in the selection of portfolios’ structure. We tested this hypothesis in a GMM methodological framework and found that such relationship holds on long run, even if there appears to be some differences in the reactions of European and United States’ stocks to financial information.
Journal: Studia Universitatis Vasile Goldiş, Arad - Seria Ştiinţe Economice
- Issue Year: 23/2013
- Issue No: 1
- Page Range: 1-12
- Page Count: 12
- Language: English