The Effects of Accounting Variables and Firm’s Characteristics on Stock prices of Companies Listed in TSE



The purpose of investment in common stock is earning a reasonable return. The stock return is comprised of two parts, capital gain yield and dividend yield. Therefore, the stock price or the price change portion of a stock's return is a criterion in common stock investment decisions. This research investigates the relationships between accounting variables and companies’ features and stock prices of the companies listed in Tehran Stock Exchange. For the investigation, we obtained a sample of 92 companies for years 1380-1386. We study the accounting variables of: book value per share, return on assets, assets turnover ratio, operating cash flow per share, earnings per share. The companies’ features that we investigate are prior period stock price, company size, and age of the company. This research uses a hierarchical Bayesian model and maximum likelihood estimation of the random effects model. The results show that there are positive relationships between stock price and the three variables of earnings per share, return on assets, and prior period stock price. Also the results show no relationships between stock price and the variables of operating cash flow per share, age of the company, and assets turnover ratio, however, there is a negative relationship between stock price and company size.