Determinants of P/E Ratio: An Empirical Study on Vietnamese Stock Market Period 2010–2020

Abstract

Using financial data and stock price of 406 listed companies in Ho Chi Minh Stock Exchange and Ha Noi Stock Exchange over the period 2010 – 2020, the author conducts a multivariate regression analysis based on the Generalized Least Squared model to investigate the determinants of P/E ratio on Vietnamese Stock Market. This study demonstrates that there is a significant positive impact of company size (measured by market capitalization) and dividend payout ratio (TLCT) on P/E ratio; whereas financial leverage (DA), return on equity (ROE), book value per share (BVPS), BETA ratio, price volatility (SD) have negative influences.