A survey on the effects of components of cash and earning persistence on the stock return in Tehran Stock Exchange

A survey on the effects of components of cash and earning persistence on the stock return in Tehran Stock Exchange

Cash flows from operating activities are one of the main indices to survey to what extent the activities of a business entity have led to sufficient cash flows in order to pay off loans, maintain the throughput of the business entity, and pay the dividends and to what extent they have facilitated new investments without using the financial resources Furthermore, considering that the stock return is the main criterion for shareholders to choose stocks and considering that the factors affecting the stock return can be useful to predict the stock return for future investments, the purpose of this research is to survey the effects of components of cash and earning persistence on the stock return in Tehran Stock Exchange. The statistical sample includes 129 non-financial companies accepted in Tehran Stock Exchange from 2009 to the end of 2015. They were selected using a screening method. The method of least squares means was used to analyze the data. The results showed that the cash flows from operating activities, cash flows from returns and earnings, cash flows from income tax activities, cash flows from investing activities, cash flows from financing activities and earning persistence have a positive and significant effect on the stock return. In addition, those results indicate that the earning persistence has a positive and significant effect on the relationship between the components of cash and stock return.