Abstract:
The objective of this research study is to Forward guide lines to the companies for following up
proper way of estimating cost of equity using accounting fundamentals. To achieve this
Objective, researcher has selected listed companies from Colombo Stock Exchange. To analysis
the relationship, two hypotheses were formulated for this research study. One is relationship
between cost of equity and earning another one is relationship between share prices and dividend.
Sample size of this research was 12, which was selected by using simple random method.
Primarily the data collected from the selected company and Colombo Stock Exchange
Publications, Magazines and related web collection. The univaitive analysis, correlation and
regression analysis were used variable analysis through the SPSS (version 16.0) and Microsoft
Excel 2010. The chart, table and graphs were used to present the collected data.
This study found there is a significant positive and negative relationship between cost of equity
and earning and relationship between share prices and dividend in listed companies from Stock
Exchange.
