VALUE RELEVANCE OF ACCOUNTING INFORMATION AND SHARE PRICE: EVIDENCE FROM NIGERIA AND SOUTH AFRICA
Faculty: Management Sciences
Odugbo, Z. T.
Okoye, E. I.
This study assessed the relationship between value relevance of accounting information and share price with a focus on manufacturing companies listed on the Nigerian Stock Exchange (NSE) and Johannesburg Stock Exchange (JSE), for a period of ten years, ranging from 2007-2016. The Ex-post facto research design was used. The study made use of secondary data obtained from fact books and annual reports and accounts of the manufacturing firms. In analyzing the collected data, the Panel Data approach was employed. Correlation co-efficient, Ordinary Least Square (OLS) regression analysis, Granger Causality test and Johansen Cointegration test were used to test the hypotheses with the aid of E-View 9.0. The results of this study revealed that there is a significant positive relationship between Book Value of Equity per Share and Share Price; a significant positive relationship between Earnings per Share and Share Price; a significant positive relationship between Dividend per Share and Share Price; a significant positive relationship between Return on Equity and Share Price; a significant negative relationship between Cash Flow and Share Price. The researcher recommends among others that standard setters, the stock market regulators and listed manufacturing firms on the NSE and JSE should continuously devise ways of improving the quality of accounting information publish in financial statements in order to maintain and increase their Value relevance to the investors and other stakeholders.
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