Capital structure plays essential role on financial strength of business units and there are literally many studies to confirm the relationship between capital structure and return growth. In this paper, we re-examine this relationship by investigating on 12 Iranian private banks using structural equation modelling over the period 2005-2011. The proposed study of this paper designs a questionnaire and distributes it among experts and analyse it use LISREL software package. The result indicates that there is a positive and meaningful relationship, when the level of significance is five percent between capital structure and stock return in private banking industry in Iran. The implementation of Pearson and Spearman correlation tests also validate the findings.
Accounting conservatism limits managerial incentive and ability to overstate performance and hide bad news from investors, which, in turn, reduces stock price crash risk. This study examines relationship between conservatism on financial reports and risk of stock price crash. Using a sample of 54 listed firms in Tehran Stock Exchange over the period of 2006–2010 and panel logistic regression, we examine different hypotheses. The results indicate that accounting conservatism, as measured by Khan and Watts (2009) CSCORE [Khan, M., & Watts, R. L. (2009). Estimation and empirical properties of a firm-year measure of accounting conservatism. Journal of Accounting and Economics, 48(2), 132-150.], reduces the likelihood of a firm experiencing stock price crashes. The finding holds after controlling other variables such as: negative skewness of firm-specific-weekly return, standard deviation of firm-specific-weekly return, the mean of firm-specific-weekly return, detrend share turnover, size, market to book value of equity ratio, total debt ratio and return on asset ratio, but we did not observe any relationship between these variables during stock price crash.
Explaining and the determinants of dividend policy is one of the biggest challenges that have long been the center of attention of accounting and financial researcher and theoreticians. There are many evidences that confirm the effects of dividend and there are a lot of other potential factors whose effects on the dividend policy have not been studied yet. In this study, the effects of four variables including asymmetric information, growth opportunities, cash holding and firm size in payout dividend policy are investigated, simultaneously. The study uses the information of 140 companies listed on Tehran Stock Exchange over the period 2005-2010. In this study, 4 hypotheses are proposed and investigated. There are positive and significant relationships between asymmetric information, growth opportunities, cash holding and company size on one side and payout dividend policy on the other side.
Information asymmetry is a situation in which one party in a transaction has more or superior information compared with another. This often happens in transactions where the seller knows more than the buyer does although the reverse also may happen. Potentially, this could be a harmful circumstance because one party can take advantage of the other party & apos; s lack of knowledge. In this paper, we examine the effect of information asymmetry on earning management. To test the research hypotheses, a sample of 47 companies listed in Tehran Stock Exchange over the period 2002-2008 based on panel data was taken. In these models, the presence or absence of effects models (fixed or random) is reviewed and finally the best model is estimated. Inference is based on significant level or p-value, thus likely that any value or significance level of the test is less than 0.05 is rejected at the 95 percent confidence level. The result shows that the information asymmetry has some meaningful effects on earnings management.
This paper presents a logistic regression model to measure risk management of receivable accounts on some selected firms from drug industry listed on Tehran Stock Exchange. The proposed study of this paper considers the effects of different variables such as current ratio, quick ratio, working capital on total assets and cash flow on economic value added. We gather the necessary information of 29 firms over the period 2006-2011. The results of our survey indicate that the proposed model of this paper is capable of forecasting high profit firms with a probability of 87.5%, 58.62% is the likelihood of predicting less profitable firms and on average, the firm could forecast profitable firms for 75.54%, successfully.
Financial statements are considered as primary sources of information for most investors to make investment decisions. A crystal clear and comprehensive annual report helps many interested parties about the performance of any business unit. However, many rules and regulations ask management teams of organizations to provide quarterly financial results. In this paper, we perform an empirical investigation to study the effects of quarterly financial reports on three ratios including systematic risk, return on assets and firm size. The proposed study gathers the necessary data from 72 firms listed on Tehran Stock Exchange over the period of 2000-2006. The study determined the performances of these 72 firms before and after the releases of three quarterly reports and using Freedman test determined whether there were any meaningful differences between two groups of data or not. The results of Freedman test indicate that there were not any meaningful differences between stock performance and systematic risk before and after quarterly results. The survey also examines the relationship between systematic risk and size of firms using Pearson correlation test and the results indicate there were some meaningful differences size and systematic risk.
Interest rate plays an important role on financial market in any different sectors from real state to auto industry. An increase on interest rates will increase cost of borrowing money from banks, which reduces profitability. The proposed study of this paper investigates the relationship between bank interest rates on performance of stock exchange over the period 2001-2010. The proposed study categorizes interest rates into five different categories including short-term interest rate, special short-term rate, one-year, two-year, three-year, four-year and five-year terms. The results of performing regression analysis have confirmed that there are some positive and meaningful relationship between interest rate in all groups and performance of stock exchange.
In this paper, we present an empirical investigation to measure the effects of privatization on some selected firms listed on Tehran Stock Exchange. The proposed study of this paper selects eleven relatively big sized Iranian firms whose structures were privatized prior year 2011. The main hypothesis of this survey studies whether there is a meaningful relationship between ownership structure and enterprise value of privatized firms. We collect the necessary information before and after privatization process completed and using a regression model examined the main hypothesis as well as five sub-hypotheses. The results of the survey indicate that the number of major shareholders has been reduced after privatization process accomplished, the number of shares had no impact on firms’ values. In addition, non-board members’ duty had not impact on firms’ value before and after privatization process, institutional investors did not play important role before and after privatization process, and separations played important role on firms’ value before and after privatization occurred.
This paper presents an empirical investigation to study the relationship between earning quality measure and excess returns on selected firms trading on Tehran Stock Exchange. The purpose of this study is to find the relative advantage of income figures reported in formal financial statements. The study uses hedge return, six accounting ratios and three market ratios and performs the study over the period of 2001-2011 using 56 firms whose shares were traded on Tehran Stock Exchange. The proposed study uses regression analysis as well as structural equation modeling. The results of this study indicate that market based figures are more influencing than accounting based ratios on hedge return. In other words, hedge return for persistency index was more predictable than smoothness and abnormal accruals. However, on the contrary to what we expected, hedge return for accruals was not more than other accounting based figures.