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Based on efficient market hypothesis the price of a given stock retlects both the historical and currently available data. To date,
many studies have heen conducted in this area [e.g., (Ball and Brawn, 196_), (Brawn and Foster 1977), (Foster, 1977), and
alike]. The results of all prior research support the proposition that financial statements and earnings' ,Innouncements have
information content.
The objective of this study was twofold. First to determine the impact of unexpected earnings' components on stock prices; and
second, to ascertain whether and how any of the following five independent variables of: firm size, finanical leverage, life, public
ownership, and foreign exchange impact on unexpected earnings, would influence the price of a stock.
The results of the study suggests that underlying premises of the efficient market hypothesis has no applicability to the Iranian
stock market, not even in its weakest form. Furthermore, there is
a strong evidence that none of the independent variables of the study bear any statistically significant relationship to the prices of stocks.