Hamid Khaleghi Mogadam; Mohammad Ali Sahmani Asl
Volume 3, Issue 12 , January 2006, , Pages 57-81
Abstract
The present study identifies the effective accounting and economic variables on P/E ratio in Tehran stock Exchange (TSE) during the 12- year period from 1992 up to 2003. The investigation and identification of accounting information in determining P/E ratio and proper function of the capital market promote ...
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The present study identifies the effective accounting and economic variables on P/E ratio in Tehran stock Exchange (TSE) during the 12- year period from 1992 up to 2003. The investigation and identification of accounting information in determining P/E ratio and proper function of the capital market promote the accounting status in the professional society.
The research is seeking to find out if the economic and corporate variables (accounting variables) can affect the P/E ratio in TSE.
This question is formed into two major hypotheses including:
1) Changes in economic variables affect the corporate PIE ratio, and
2) Accounting variables affect the corporate P/E ratio.
Ex-post multiple factor analysis was applied to test the hypotheses. Furthermore, linear regression, and GEE and TSCSREG statistical instruments were also applied as well as panel Data Analysis.
The research findings indicates P/E ratio is much more affected by accounting variables than economic ones, while there is a strong correlation between the economic variables and corporate PIE ratio in TSE.
