THE EFFECTS OF FINANCIAL DECISIONS ON MARKET VALUE OF THAI LISTED COMPANIES IN THE SET CLMV EXPOSURE INDEX (SETCLMV)

Authors

  • Thanida Chitnomrath College of Innovative Business and Accountancy, Dhurakij Pundit University

Keywords:

Financial Decisions, Financing, Investment, Dividend Policy, Market value

Abstract

The objective of this research is to study the impact of financial decisions on market value of Thai listed companies in the SETCLMV Exposure index. Financial decisions studied include financing, investment, and dividend policy decisions. Financial data of all 31 companies in the SETCLMV Exposure index which are large companies are collected from Form 56-1 for a period of 5 years from 2014-2018. The total number of observations is 152. The set of statistics used in the analysis consists of descriptive statistics and multiple regressions including correlation analysis. The results show that all financial decisions have a statistically significant impact on market value of the large companies. Financing decisions as measured by debt to equity ratio and investment decisions as measured by the return on assets have positive effects on the price to book ratio as a proxy of market value. The decision on dividend policy, which is measured by the dividend yield, has a negative effect on market value. The results indicate that financial decisions of large companies (financing, investment, and dividend decisions) are important for an increase or decrease in their market value

Downloads

Download data is not yet available.

References

Adekunle, A. O., & Kajola, S. O. (2010). Capital structure and firm performance: Evidence from Nigeria. European Journal of Economics, Finance and Administrative Sciences, 3(25), 120-131.

Aggarwal, D., & Padhan, P.C. (2017). Impact of capital structure on firm value: Evidence from Indian hospitality industry. Theoretical Economics Letters, 7, 982-1000. Retrieve September 15, 2018, from https://file.scirp.org/Html/20-1501157_77070.htm.

Anton, S. G. (2016). The impact of dividend policy on firm value: A panel data analysis of Romanian listed firms. Journal of Public Administration, Finance and Law, 10, 107-112.

Asiri, B. K., & Hameed, S. A. (2014). Financial ratios and firm’s value in the Bahrain Bourse. Research Journal of Finance and Accounting, 5(7), 1-9.

Brigham E. F., & Ehrhardt, M. C. (2017). Financial management: Theory & practice (15th ed.). Boston, MA: Nelson Education.

Brigham, E. F., & Houston, J. F. (2018). Fundamental of financial management (15th ed.). Boston, U.S.A: Cengage.

Cheng, M., & Tzeng, Z. (2011). The effect of leverage on firm value and how the firm financial quality influence on this effect. World Journal of Management, 3(2), 30-53.

Chowdhury, A., & Chowdhury, S. P. (2010). Impact of capital structure on firm’s value: Evidence from Bangladesh. Business and Economic Horizons, 3(3), 111-122.

Dadrasmoghaddam A., & Akbari S. M. (2015). Relationship between financial ratios in the stock prices of agriculture-related companies accepted on the Stock Exchange for Iran. Research Journal of Fisheries and Hydrobiology, 10(9), 586-591.

Egbeonu, O. C., Edori, I. S., & Edori, D. S. (2016). Effect of dividend policy on the value of firms (Empirical study of quoted firms in Nigeria Stock Exchange). Research Journal of Finance and Accounting, 7(3), 17-24.

Gunawan, I. M., Pituringsih, E., & Widyastuti, E. (2018). The effect of capital structure, dividend policy, company size, profitability and liquidity on company value (Study at manufacturing companies listed on Indonesia Stock Exchange 2014-2016). International Journal of Economics, Commerce and Management, VI(6), 405-422.

Higgins, R. (2015). Analysis for financial management (11th ed.). New York: Mcgrawhill/Irwin.

Hong, S. (2017). The effect of debt choice on firm value. The Journal of Applied Business Research, 33(1), 135-140.

Karakus, R., & Bozkurt, I. (2017). The effect of financial ratios and macroeconomic factors on firm value: An empirical analysis in Borsa Istanbul. RSEP International Conferences on Social Issues and Economic Studies, Proceeding of the 4th RSEP Multidisciplinary Conference (pp.27-34). Prague, Czech Republic: The Review of Socio-Economic Perspectives RSEP. Retrieved September 15, 2018, from https://doi.org/10.19275/RSEPCONFERENCES091.

Lebo, T. C., & Tasik, H. (2018). The impact of financial ratios on price to book value (PBV) in automotive and component sub sector listed in IDX within 2007-2016 periods. E-Journal of Universitas Sam Ratulangi, Indonisia, 5, 3(2017)), 1-9. Retrieved September 15, 2018, from https://ejournal.unsrat.ac.id/index.php/emba/article/viewFile/17463/17018.

Ligocka, M., & Stavarek, D. (2019). The relationship between financial ratios and the stock prices of selected European food companies listed on Stock Exchanges. Acta Universitatis Agriculturae et Silviculturae mendelianae Brunensis, 27, 299-307.

Malhotra, N., & Tandon, K. (2013). Determinants of stock prices: Empirical evidence from NSE 100 Companies. International Journal of Research in Management & Technology, 3(3), 86-95.

Marsha N., & Murtaqi I. (2017). The effect of financial ratios on firm value in the food and beverage sector of the IDX. Journal of Business and Management, 6(2), 214-226.

Matthew, O. M., Enekwe, C. I., & Anyanwaokoro, M. (2014). Effect of dividend payment on the market price of shares: A study of quoted firms in Nigeria. Journal of Economics and Finance, 5(4), 49-62.

Moridipour, H., & Farrahipour, Z. (2013). The evaluation of the relationship between price-to-book ratio and accounting variables. International Research Journal of Applied and Basic Sciences, 6(10), 1485-1488.

Nwamaka, O. C., & Ezeabasili, V. (2017). Effect of dividend policies on firm value: Evidence from quoted firms in Nigeria. International Journal of Management Excellence, 8(2), 956-967.

Okafor, C. A., & Mgbame, C. O. (2011). Dividend policy and share price volatility in Nigeria. Jorind, 9, 202-210.

Ozturk, H., & Karabulut, T. A. (2018). The relationship between earnings-to-price, current ratio, profit margin and return: An empirical analysis on Istanbul Stock Exchange. Accounting and Finance Research, 7(1), 109-115.

Paminto, A., Setyadi, D., & Sinaga, J. (2016). The effect of capital structure, firm growth and dividend policy on profitability and firm value of the oil palm plantation companies in Indonesia. European Journal of Business and Management, 8(33), 123-134.

Rahim, A. R., Yaacob, H. M., Alias, N., & Nor, M. F. (2010). Investment, board governance and firm value: A panel data analysis. International Review of Business Research Papers, 6(5), 293-302.

Stock Exchange of Thailand (SET). (2018). SET CLMV Exposure Index (SETCLMV). Retrieved September 15, 2018, from www.set.or.th.

Sharif, T., Purohit, H., & Pillai, R. (2015). Analysis of factors affecting share prices: The case of Bahrain Stock Exchange. International Journal of Economics and Finance, 7(3), 207-216.

Soewarno, N., Arifin, S. Y., & Tjahjadi, B. (2017). The mediating effect of leverage and dividend policy on the influence of corporate governance towards firm value. In Y.Y. Abdul Talib, S. Ishak,

A. Ahmi, F.H. Rusly, R.H. Raja Mohd Ali, M.H. Mohd Sharif, & D. Abdul Kadir (Eds.), Proceeding of The 17th Annual Conference of the Asian Academic Accounting Association (2016 FourA Conference), SHS Web of Conferences, 34, 04002 (2017). Kuching Sarawak, Malaysia: EDP Sciences. Retrieved September 15, 2018, from https://www.shs-conferences.org/articles/shsconf/abs/2017/02/contents/contents.html.

Titman, S., & Keown, A. J. (2014). Financial management: Principles and applications (12th ed.). Austin: Pearson.

Published

2020-03-30

How to Cite

Chitnomrath, T. (2020). THE EFFECTS OF FINANCIAL DECISIONS ON MARKET VALUE OF THAI LISTED COMPANIES IN THE SET CLMV EXPOSURE INDEX (SETCLMV). Suthiparithat, 34(109), 257–269. Retrieved from https://so05.tci-thaijo.org/index.php/DPUSuthiparithatJournal/article/view/242311

Issue

Section

Research Articles

Most read articles by the same author(s)