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Abstract
The purpose of this study is to investigate how macroeconomic and firm-specific factors affect Nepal's commercial banks' share prices. The study's independent variables are company size (SIZE), earnings per share (EPS), return on assets (ROA), dividend per share (DPS), inflation (INF), interest rates (IR), and gross domestic product (GDP). The dependent variable is market price per share (MPS). The study makes use of secondary panel data encompassing ten major commercial banks over a ten-year period, from the fiscal year 2013–14 to 2023–24. To ensure systematic and insightful analysis, descriptive statistical tools, ratio analysis, correlation, and regression tests were employed. The results show that EPS and MPS have a strong and statistically significant positive association, indicating that profitability is a major factor in determining stock prices and investor perceptions. Likewise, DPS and Inflation (INF) have positive impact on MPS. Conversely, ROA has a significant negative effect on MPS. On the other hand, variables such as firm size (SIZE), interest rates (IR), and GDP do not show a significant impact on MPS, implying that investors tend to focus more on firm-specific factors like EPS and DPS rather than broader macroeconomic indicators or the bank’s overall size. In conclusion, EPS emerges as a crucial
determinant of MPS, underscoring the importance of profitability in enhancing market valuation. Keywords: Earnings per share, Return on assets, Dividend per share, Inflation, Interest rates, GDP, Market price per share, Correlation, and Regression.