Study On The Correlation Between The Financial Information And Stock Price Based On The Effectiveness Of The Market

With the continuous development of the economy, the reform of Financial and Capital Market also has a fast development. Under the need of modern investors but also the development of China’s capital market, this paper studied on the effectiveness of China’s capital market. This paper focused on the problems such as how the correlation between China’s capital market and financial information of listing corporation after the promulgation of the new accounting standards, whether the China’s capital market is semi strong form efficient market, what’s the effectiveness like in the capital market, and if it was more and more effective.This paper examines the effectiveness of China’s capital market according to the theory of the value relevance of efficient market hypothesis, the modern information theory, surplus value model of financial information, This paper also examines the relationship between listing Corporation and financial information and stock price, and it is proved that China’s stock market is a semi-strong form efficient market, and the effectiveness is more and more strengthened.Firstly, the related theory of information and the stock price is studied, Then, the pricing model of stock price including the capital asset pricing model, dividend value model and the residual value of the model are analyzed and compared, Therefore, this paper conducts an empirical study to the financial information and stock price. Secondly, this paper combined with the residual value model and analysis method of Du Pont, deduced the multivariate regression model of this study. This paper chooses 8 indexes on behalf of corporate profitability, operation ability and debt paying ability, quarterly collected the financial data of 2006-2014 listing Corporation, and made the correlation analysis and empirical research on the stock price and financial indicators, after the stock price further correction analysis come to the following conclusions:(1) The stock market of our country in improving, and the correlation between stock price and the listing Corporation’s financial information is more and more strong, the semi-strong form efficient is increasing,the quality of financial information disclosure has increased year by year.(2) The profitability index and stock price has a strong correlation.(3) The stock pricing in our country is more and more diversified.(4)There are lots of irrational behaviors exist in China’s current investment institutions and investors(5) The effectiveness of China’s capital market is not stable.In a word, this paper proved the effectiveness of China’s capital market through empirical research, and came to conclusion that earnings per share is the most effective information in all of the listing Corporation disclosed financial information. I hope to give investors some reference and inspiration. On the other hand, I also hope the paper can propose some feasible suggestions to perfect the capital market of our country.