Asian Journal of Research in Business Economics and Management
Year : 2014, Volume : 4, Issue : 7
First page : ( 240) Last page : ( 250)
Online ISSN : 2249-7307.

Investigating the Ratio of Relationship between Economic Profit and Stock Returns in Chemical Industries Companies Listed in Tehran Stock Exchange during the Years 2011 to 2016

Taheri Abouzar

Department Of Accounting, Islamic Azad University, Susangerd Branch, Susangerd, Iran

Online published on 5 July, 2014.

Abstract

For many years the economists criticize accountants about this point that what they report as profit is the result of assumptions that do not have real return. They believe that accountants ignore some of the realities in calculating the profit. In respect of economy, the profit means increase of wealth. In other words, the profit of a period is the difference of the wealth at the end and at the beginning of a period, while in respect of accounting; the profit is the difference of costs and incomes during each one definite period. In other words, the economic value added has a determinant role in increasing shareholders’ wealth. Thus, in this research we expect that there is a significant relationship between the stock returns and the economic value added, and the changes of economic profit can also justify the change in the market value of company more than accounting profit.

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Keywords

Economic Profit, Stock Returns, Tehran Stock Exchange, Chemical Industries Companies.

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