RISK-RELATED DETERMINANTS OF STOCK PRICES IN AN EMERGING MARKET: EVIDENCE FROM BANGLADESH

Abstract

The capital market acts as an intermediary, channeling surplus funds into productive investments that promote economic growth. This study examines the risk-related factors influencing the market prices of stocks in Bangladesh’s corporate sector. Employing a quantitative approach, data from 120 manufacturing companies listed on the Dhaka Stock Exchange (DSE) for the period 2014–2024 were analyzed. A rolling 10-year window was applied to calculate the sample variables. The study measured operating leverage, financial leverage, total leverage, earnings per share (EPS), and systematic risk (Beta), and assessed their relationships with stock prices using correlation and regression analyses in SPSS and STATA. The results indicate significant associations: EPS exhibits a strong positive correlation with stock prices, whereas systematic risk (Beta) and operating leverage are negatively related. These findings identify key determinants of stock valuation in Bangladesh and provide valuable insights for investors, corporations, and policymakers.