Factors Determining Price Earning Ratio

Mpaata, Kaziba Abdul. (Adv.: Drs. R. Agus Sartono, MBA.), Drs. R. Agus Sartono, MBA.

2015 | Skripsi | S2 Management

The research on factors that have been responsible for determining price/earning ratio is not new. Financial economists have indeed scientifically documented them. The method however has been that of relating one factor and the other and then strong arguments have been put up to support their findings. There has been no much effort to relate all these factors in a modal form which is urgently desired in this revolutionary and competitive environment. Thus, investors have always questioned a more complete technique on which they can precisely base in order to predict and make wise investment decisions. The information available, though very useful, has not only been scanty but incomplete as

well.

Based on the description above, the researcher eagerly wants to find out some empirical evidence concerning the factors which are said to be the determinants of the price earning (P/E) ratio and thereby provide a method which can be used as a tool among other means for investment. The more procedures investors have to value common stocks, the more likely they are to obtain reasonable results.

The research is exploratory. Data was collected, from United States Of America as reported by the dividend achiever status from 1987 through 1993. Regression analysis was adopted in data processing.

Kata Kunci : Price Earning Ratio