This study examines the relation between residual earnings and stock prices in Tehran Stock Exchange (TSE). The analysis is based on a residual income model that expresses the value of the firm in terms of book value of equity and residual income. The model holds for any clean surplus accounting system. The study address the question that whether book value per share (BV) and abnormal (residual) earnings per share (RE) have incremental and relative explanatory power or not. We find that RE have less explanatory power than BV. Also, we find that accounting book value of equity and residual earnings are positively and significantly related to current stock prices in Tehran Stock Exchange (TSE).
Pourheydari,O and Ali Ahmadi,S . (2006). The Relation between Residual Income and Stock Price in Tehran Stock Exchange. Empirical Studies in Financial Accounting, 4(15), 1-14.
MLA
Pourheydari,O , and Ali Ahmadi,S . "The Relation between Residual Income and Stock Price in Tehran Stock Exchange", Empirical Studies in Financial Accounting, 4, 15, 2006, 1-14.
HARVARD
Pourheydari O, Ali Ahmadi S. (2006). 'The Relation between Residual Income and Stock Price in Tehran Stock Exchange', Empirical Studies in Financial Accounting, 4(15), pp. 1-14.
CHICAGO
O Pourheydari and S Ali Ahmadi, "The Relation between Residual Income and Stock Price in Tehran Stock Exchange," Empirical Studies in Financial Accounting, 4 15 (2006): 1-14,
VANCOUVER
Pourheydari O, Ali Ahmadi S. The Relation between Residual Income and Stock Price in Tehran Stock Exchange. Empirical Studies in Financial Accounting. 2006;4(15):1-14 (In Persian).
