Abstract:
The objective of the study was to identify the effect of selected micro variables
on the stock prices of selected manufacturing companies listed in Colombo
Stock Exchange (CSE). Researcher used the secondary data which was
collected from the annual reports of selected companies for the period of 5
years. The sample of 29 companies was selected for this study representing
manufacturing sector entities. In this study, Return on Equity, Book Value per
Share, Earnings Per Share, Price Earnings Ratio, Dividend Per Share,
Dividend Yield, Firm Size, and Financial Leverage were used as independent
variables with the Stock Prices as the dependent variable. The data have been
analyzed by using descriptive statistics, correlation and regression analysis to
find out the effect of the micro variables on the stock prices. According to the
results of the overall analysis, there was significant impact of book value per
share, dividend per share, dividend yield, firm size and financial leverage on
the stock prices. Further, it was identified that there was an insignificant
impact of return on equity, earnings per share, price earnings ratio on the stock
prices. According to the final result majority of financial micro factors
significantly affect to the stock prices.
