FIRM-SPECIFIC FACTORS AND ITS IMPACT ON STOCK PRICE IN NON-LIFE INSURANCE COMPANIES OF NEPAL

Abstract

This study examines the impact of firm specific factors on stock price of Nepalese non-life insurance companies. Market price per share is taken as dependent variable whereas earnings per share, dividend per share, price earnings ratio and book value per share are taken as independent variables. The study is based on secondary data and has been collected from the annual reports available on the websites of sampled insurance companies and Nepal Insurance Authority. Five non-life insurance companies have been selected as a sample over the period from 2013/14 to 2022/23 having total 50 observations. The study employed descriptive and casual comparative research design where the hypothesis was tested using the correlation and regression coefficients based on the results of the Pearson correlation coefficient & multiple regression model. The result shows that there is positive correlation of market price per share with earnings per share, dividend per share, price earnings ratio and book value per share. Similarly, under the regression model, the result shows that earnings per share, dividend per share and price earnings ratio affect the market price per share in a significant positive manner while book value per share affects in an insignificantly negative way.