Comparative Investigating of Stock Valuation Discount Models in Companies Listed in Tehran Stock Exchange

Document Type : Original Article

Authors

1 Associate Prof. Department of Accounting, University of Isfahan, Isfahan, Iran.

2 Islamic Azad University, Shahrekord Branch

Abstract

Stock investing decisions require information which Obtain through valuation models. Therefore, the purpose of this study is to compare the accuracy of the Dividend Discount Model, the Discounted Cash Flow Model, the Residual Earnings Model and the Abnormal Earnings Growth Model in explaining the stock price changes of listed companies in Tehran Stock Exchange during 2012-2018 (Iranian calendar 1391-1397). Target sample consists of 105 companies listed in Tehran stock exchange. Collected data were analyzed using T-test method.  The results show that in the Tehran Stock Exchange the intrinsic values estimated by the Dividend Discounted and the discounted cash flow model have the highest correlation with the market value of the stocks. These results also indicate that in the Tehran Stock Exchange These results show that cash dividends and cash flows were used more than any other information as a criterion for buying and selling stocks.

Keywords

References

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Financial Management Perspective
Volume 11, Issue 33
April 2021
Pages 113-138

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