Economics, Econometrics and Finance
8 years ago

Small firms with low book-to-market equity offer highest stock returns

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Journal of Emerging Trends in Economics and Management Science
Relationship between stock returns and firm size, and book-to- market equity: empirical evidence from selected companies listed on milanka price index in Colombo stock exchange
M.A.C.N. Shafana, A.L. Fathima Rimziya, Achchi Mohamed Inun Jariya

Paper Summary

The study looked at how firm size and book-to-market equity affect stock returns in Sri Lanka. They analyzed data from 12 companies listed on the Colombo Stock Exchange from 2005 to 2010. The results showed that book-to-market equity has a negative impact on stock returns, while firm size doesn't have a significant effect. This means that investors may want to consider investing in small or large firms with low book-to-market equity for better returns. Additionally, the study found that book-to-market equity affects stock returns differently for financial and non-financial companies.

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