ACCOUNTING CRITERIA AND ECONOMIC PERFORMANCE EVALUATION WITH STOCK RETURN: IRANIAN SCENARIO

The main objective of investors from investing in share companies is increasing wealth; which can be achieved by return acquiring from purchased shares. The purpose of current study is to investigate the possible relation between Stock returns the tow independent variables (Economic Value Added and Tobin’s Q Ratio reported by companies). The outcome of the study can suggest criteria to investors to make a convenient decision in comparison between different shares. Totally 120 listed companies in Tehran Stock Exchange are chosen during 2005-2009 as a sample of the study. The results indicate that the 95 percent confidence level, Tobin Q indicator variable relationship with stock returns is significant but the economic value is not significant relation with stock returns. Moreover, these two independent variables, together can explain stock returns. Determination coefficient obtained for the above relationship shows that only part of the independent variables could explain the stock returns and investors should evaluate stock returns, other factors are also considered.