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Abstract:
The study examines the determinants of price-earnings ratio using 47 non-financial firms listed in the Nigerian Stock Exchange over the period 2012 to 2016. The essence of the study is to suggests alternative way of valuing stock by investors. Using quantile regression and pooled regression models, the study finds that the independent variables explained more of the systematic variation in P/E ratio at the 25th percentile. Dividend pay-out ratio, share price and dividend per share were statistically significant to explain P/E ratio at the 25th, 50th and 75th percentiles. At the 25th percentile, dividend per share has significantly negative impacts on P/E ratio while dividend pay-out ratio, profitability, market return, average share price and total dividend paid has positively significant impacts on P/E ratio. at the 50th percentile, dividend pay-out ratio, profitability, average share price and firm size has significantly positive impacts on P/E ratio while earnings per share and dividend per share has significantly negative influence on P/E ratio. at the 75th percentile, earnings growth rate has significantly negative impacts on P/E ratio while dividend pay-out ratio and average share price has positively significant effects onP/E ratio.
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