IMPACT OF RETAINED EARNINGS ON STOCK RETURNS OF SELECTEDAUTOMOBILE COMPANIES

Ms. V.Kannammal; Dr.P.Jayasubramanian

Volume : VIII, Issue : V, May - 2019

IMPACT OF RETAINED EARNINGS ON STOCK RETURNS OF SELECTEDAUTOMOBILE COMPANIES

Ms. V. Kannammal, Dr. P. Jayasubramanian

Abstract :

The study is to identify the effect of retained earnings on stock returns of automobile industry listed in Bombay Stock Exchange. The study used three sub variables of stock returns, i.e. capital gain/loss yield, stock prices, cash dividend per share, and identify its relationship with retained earnings. The analysis consists of five active companies of automobile industry and used the data for a period of 2012–13 to 2015–16. The study used convenience sampling of non– probability method and used linear regression and Spearman’s correlation analysis. The study found a weak and insignificant relationship between retained earnings and cash dividend per share and capital gain/loss yield. The study also found a moderate positive and significant relationship between retained earnings and closing price of stock. The study concluded that the retention of earnings has a weak and insignificant relationship with stock returns