Relationship Between Stock Price and Financial Distress: A Study on Banks of Bangladesh

摘要

The purpose of this study is to empirically test relationship between financial distress and stock price. Financial distress is calculated using Altman Z-score. Data for the study consists of financial information of 29 banks listed in Dhaka Stock Exchange (DSE). Variables in this study are Z-score (independent) and Stock price (dependent). This study analyzes and describes the data associated with these variables and linear regression has been done between them to ascertain the level of and direction of their relationship. The trends of z-score for the study period (2015-2019) have been tested. This study finds there is no significant relationship between the variables. In other words, Z-score is unable to explain the variability in the stock price.