| Title : | Relationship between capital structure and stock return in Nepalese commercial banks | | Material Type: | printed text | | Authors: | Sapna Bista, Author | | Publication Date: | 2017 | | Pagination: | 102p. | | Size: | GRP/Thesis | | Accompanying material: | 10/B | | Languages : | English | | Descriptors: | Capital structure
| | Class number: | 658.1522 | | Abstract: | The capital structure and stock return have become one of the quite attractive option of both existing and potential investors. It is not only demanded by the high-class investors, but also has attracted the interest of small investors. The high rate of return pushes the investors to invest in stocks, but many of them do not have much knowledge about its operations, capital structure and factors affecting to stock return’s fluctuations. There are various internal and external factors that influence the capital structure and stock return. The capital structure of companies are most essential internal factors that the investors use in making decisions whether to invest in stock or not? It can give visibility to investorswhich plays a significant role to gain reliable and consistent return by selecting winning portfolio.
This study attempts to examine the relationship between capital structure and stock return of Nepalese commercial banks. The study is based on secondary data of 21 commercial banks with 126 observations for the period of 2011 to 2016. Data and informationhave been collected form Banking and Financial Statistics published by Nepal Rastra Bank, share price published by Nepal Stock Exchange, economic survey and annual reports of selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the capital structure and stock return in Nepalese commercial banks.
The result shows that the average stock return is highest for ADBL (57.90 percent). The average stock return is highest for NBBL (27.01 percent) and lowest for KBL (-11.28 percent). The average leverage is highest for NSBI (15.93 percent) and lowest for NBL (-7.31 percent).The average liquidity is highest for GBL (31.65 percent) and lowest for ADBL (8.21 percent).The average bank size is highest for NBBL (Rs. 286,986.5 million) and lowest for JBNL (Rs. 17,757.62 million).The average return on assets is highest for NIBL (2.90 percent) and lowest for JBNL (0.62 percent).
The descriptive statistics for selected commercial bank shows that the average stock return, leverage, liquidity, return on assets, bank size, inflation and gross domestic product are 22.20 percent, 9.45 percent, 15.92 percent, 1.58 percent, Rs. 51,937 million, 8.62 percent and 9.73 percent respectively.
The correlation matrix shows that leverage is positively related to stock return. Similarly, liquidity is positively related to the stock return. Likewise, return on assets is positively correlated to the stock return. Bank size is also positively related to stock return. However, inflation and gross domestic productis negatively related to stock return. The result also states that stock return, return on assets, bank size and inflation have positive relationship with leverage. However, liquidity and gross domestic product have negative relationship with leverage.
The regression analysis reveals that stock returnhas positive impact on leverage. This indicates that higher stock return, higher would be the leverage. However, liquidity has negative impact on leverage. This reveals that higher the liquidity, lower would be the leverage. On the other hand, return on assets has positive impact on leverage. This states that higher the return on assets higher would be the stock return. Similarly, bank size has positive impact on leverage. This states that larger the bank size, larger would be the leverage. Likewise, inflation has positive impact on leverage. This reveals that higher the inflation, higher would be the leverage. Nevertheless, gross domestic product has negative impact on leverage. This denotes that higher the gross domestic product, lower would be the leverage.
The study also shows that leverage has positive impact on stock return. This reveals that higher the leverage higher would be the stock return. Similarly, liquidity has positive impact on stock return. This shows that higher the liquidity, higher would be the stock return. Likewise, return on assets has positive impact on stock return. This states that higher the return on assets, higher would be the stock return. Thebank size has positive impact on stock return. This reveals that larger the bank size, higher would be the stock return.However, the inflation also has negative impact on stock return. This states that higher the inflation, lower would be the stock return. Likewise, the gross domestic product has negative impact on stock return. This denotes that higher the gross domestic product, lower would be the stock return.
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Relationship between capital structure and stock return in Nepalese commercial banks [printed text] / Sapna Bista, Author . - 2017 . - 102p. ; GRP/Thesis + 10/B. Languages : English | Descriptors: | Capital structure
| | Class number: | 658.1522 | | Abstract: | The capital structure and stock return have become one of the quite attractive option of both existing and potential investors. It is not only demanded by the high-class investors, but also has attracted the interest of small investors. The high rate of return pushes the investors to invest in stocks, but many of them do not have much knowledge about its operations, capital structure and factors affecting to stock return’s fluctuations. There are various internal and external factors that influence the capital structure and stock return. The capital structure of companies are most essential internal factors that the investors use in making decisions whether to invest in stock or not? It can give visibility to investorswhich plays a significant role to gain reliable and consistent return by selecting winning portfolio.
This study attempts to examine the relationship between capital structure and stock return of Nepalese commercial banks. The study is based on secondary data of 21 commercial banks with 126 observations for the period of 2011 to 2016. Data and informationhave been collected form Banking and Financial Statistics published by Nepal Rastra Bank, share price published by Nepal Stock Exchange, economic survey and annual reports of selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the capital structure and stock return in Nepalese commercial banks.
The result shows that the average stock return is highest for ADBL (57.90 percent). The average stock return is highest for NBBL (27.01 percent) and lowest for KBL (-11.28 percent). The average leverage is highest for NSBI (15.93 percent) and lowest for NBL (-7.31 percent).The average liquidity is highest for GBL (31.65 percent) and lowest for ADBL (8.21 percent).The average bank size is highest for NBBL (Rs. 286,986.5 million) and lowest for JBNL (Rs. 17,757.62 million).The average return on assets is highest for NIBL (2.90 percent) and lowest for JBNL (0.62 percent).
The descriptive statistics for selected commercial bank shows that the average stock return, leverage, liquidity, return on assets, bank size, inflation and gross domestic product are 22.20 percent, 9.45 percent, 15.92 percent, 1.58 percent, Rs. 51,937 million, 8.62 percent and 9.73 percent respectively.
The correlation matrix shows that leverage is positively related to stock return. Similarly, liquidity is positively related to the stock return. Likewise, return on assets is positively correlated to the stock return. Bank size is also positively related to stock return. However, inflation and gross domestic productis negatively related to stock return. The result also states that stock return, return on assets, bank size and inflation have positive relationship with leverage. However, liquidity and gross domestic product have negative relationship with leverage.
The regression analysis reveals that stock returnhas positive impact on leverage. This indicates that higher stock return, higher would be the leverage. However, liquidity has negative impact on leverage. This reveals that higher the liquidity, lower would be the leverage. On the other hand, return on assets has positive impact on leverage. This states that higher the return on assets higher would be the stock return. Similarly, bank size has positive impact on leverage. This states that larger the bank size, larger would be the leverage. Likewise, inflation has positive impact on leverage. This reveals that higher the inflation, higher would be the leverage. Nevertheless, gross domestic product has negative impact on leverage. This denotes that higher the gross domestic product, lower would be the leverage.
The study also shows that leverage has positive impact on stock return. This reveals that higher the leverage higher would be the stock return. Similarly, liquidity has positive impact on stock return. This shows that higher the liquidity, higher would be the stock return. Likewise, return on assets has positive impact on stock return. This states that higher the return on assets, higher would be the stock return. Thebank size has positive impact on stock return. This reveals that larger the bank size, higher would be the stock return.However, the inflation also has negative impact on stock return. This states that higher the inflation, lower would be the stock return. Likewise, the gross domestic product has negative impact on stock return. This denotes that higher the gross domestic product, lower would be the stock return.
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