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Research On P/E Ratio Of China's Stock Market For A Shares

Posted on:2005-02-05Degree:MasterType:Thesis
Country:ChinaCandidate:B LiFull Text:PDF
GTID:2156360122999116Subject:Finance
Abstract/Summary:PDF Full Text Request
P/E ratio is extremely important to evaluate value, to evaluate risk and to evaluate earnings. It is useful to appraise P/E ratio because it is not only the crucial foundation for concerning supervision authorities to establish sound macro dominating measures, but it can help most of the investors to discern market risks and implement fitting investment tragedy, the discussions about whether the P/E ratio is high or low heated theoretical field and stock market for several times, owning to be for lack of deep research on the conditions of P/E ratio, different people have different opinions in the discussion, which in return influence the correct evaluation on the P/E ratio of security managers and many investors. Now the institute investors are becoming the principal part of the stock market, which results in the changes in investment faith and the changes in the stock market. How to appraise the present conditions of P/E ratio is meaningful to direct investment and provide basis for authorities to supervise stock market. Because of the existing of special conditions of China's stock market, it is not appropriate to appraise the P/E ratio simply, by contraries, it is necessary for us to probe its basic characteristic, and to explore its structure and general status in detailed, which aiming at helping us to have a better understanding over P/E ratio in these two stock market.In order to reach the target above, this paper basing on detailed data of China's stock market, makes use of empirical method, probes the basis characteristic of P/E ratio of China's stock market, finds out the difference of P/E ratio, studies all kinds of factors exerting impact on P/E ratio, and establishes appropriate scope for P/E ratio of stock market for A shares. This paper, according to empirical research results, assesses the general conditions of P/E ratio, analyzes its reasons and makes policy proposition.This paper consists of five chapters, whose main contents are as follows.Chapter one is introduction, which introduces research background, and, basing on the existing reference at home and broad, explains the study trains and method.Chapter two aims at introducing concerned theories. It narrates the P/E ratio's definition, characteristic, calculation method and caliber. Making use of model of present value of stock dividend, the paper deduces the inherent factors which influences P/E ratio, growth rate of stock dividend and ROI requested by investors. Making use of the definition of P/E ratio, we get such extrinsic factors as stock price index and aggregate earnings.Chapter three conduct empirical research on P/E ratio of stock market for A shares. It analyzes the general conditions of P/E ratio of China's stock market, sorts the P/E ratio according to operating condition, industries and circulating equity size, and explores their characteristic respectively.Chapter four focus on reasonable scope of P/E ratio of stock market for A shares. First we conduct the transnational comparison of P/E ratio, then in line with P/E ratio's special status in China, we deduce the model of reasonable P/E ratio by making use of model of present value of stock dividend, at last, we select lots of fitting data and calculate the reasonable scope of P/E ratio of stock market for A shares.Chapter five analyzes the P/E ratio of China's stock market for A shares. Basing on the criteria established above, we evaluate P/E ratio of China's stock market for A shares, and probe the causes of P/E ratio being on the high side.Chapter six mainly makes policy proposition on the development of China's stock market from the point of view of P/E ratio.
Keywords/Search Tags:P/E ratio, empirical research, China's stock market for A shares
PDF Full Text Request
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