بررسي رابطه بين تغييرات عايدي پيش بيني شده هر سهم با تغييرات قيمت سهام

Review of the Relationship between Predicted Earnings per shareʹs (EPS) Changes and Stock price Changes

In order to become involved in the purchase and sales (exchange) of stocks, it is necessary for investors to investigate the predicted value of stocks of each company in the future. Obviously determination of such value would depend on predictions of earning power of companies in the future. This paper attempts to review the changes in stock price vis-a-vis announcement concerning adjustments of predicted EPS, in Tehran Stock Exchange (TSE). Thus with the help of the literature, basic concepts were extracted as basis for setting the hypotheses and statistical tests. To analyze these hypotheses, changes in stock price during a period of 3 days before and after the date of announcement of adjustments for EPS were considered. Statistical population included companies actively traded in TSE throughout a 5-year period (2001- 2005), and stocks, that had at least one adjustment for predicted EPS. Companies that were member of the population and the related adjustment were considered together as one main group and four subsidiary groups (according to the classifications made of companies based on year end dates). Two hypotheses were made for this research and were analyzed using a normal linear regression equation and a Chi-2 test. Results indicated that a significant relationship existed between changes in predicted EPS and changes in stock price. However market reaction has been somewhat slow and this could be due to the dissemination of information by non-accounting and through informal sources.