aAssistant Prof., Department of Accounting, management and economic college, Shiraz Branch, Islamic Azad University, Shiraz, Iran
bDepartment of accounting, college of human science, marvdasht branch, Islamic azad university, marvdasht, Iran
Online published on 4 June, 2015.
This study investigates the application of clean surplus accounting in predicting stock returns of companies listed on Tehran Stock Exchange. Regarding the effect of this method and the relationship between research variables and stock return, this research sought to assist investors in selecting the stocks with fairly highest earning and return rates. For this purpose, four hypotheses were proposed. The population is all companies listed on Tehran Stock Exchange from 2007 to 2012. Results showed that the explanatory power of sock returns through return on equity measure under clean surplus accounting method is greater than under dirty surplus accounting. There is a positive significant correlation between return on equity and stock returns and corporate size in clean surplus accounting method. In addition, there is not any significant relationship between return on equity and institutional ownership under clean surplus technique.
Clean surplus accounting, dirty surplus accounting, Institutional ownership, Company's size
