Study of relationship between Tobin's Q and Dividend per Share in evaluation of Company Performance (Evidence from Tehran Stock Exchange)

Tobin's Q ratio serves primarily as an important measure of managerial performance. This technique belongs to the class of combined indicators built upon accounting and market information, and according to many researchers, it is one of the best company performance and valuation indicators. Current paper seeks to answer the question as whether the mentioned indicator can be a suitable complementary to dividend per share (DPS) on Tehran Stock Exchange (TSE). In addition, Tobin's Q is further examined in relation to the accounting performance measures earnings per share (EPS), price to earnings (P/E), return on assets (ROA), and return on equity (ROE). For the purpose of this study, 168 listed firms on TSE whose financial data in the period 2006 through to 2012 was available were selected. The results suggested significant relationship of Tobin's Q with DPS and other profitability-based accounting measures in the understudy companies.