The effect of projected cash flows, the volatility of expected returns and cost of Equity Capital in Companies Listed in Tehran Stock Exchange

• Damavandi, Marzieh ^[1] ; Nikbakht, Mohammad Reza ^[2]
  1. [1] Islamic Azad University

     Islamic Azad University

     Irán

     
  2. [2] University of Tehran

     University of Tehran

     Irán

     
• Localización: Revista Publicando, ISSN-e 1390-9304, Vol. 5, Nº. 14, 2 (Enero-Febrero-Marzo), 2018, págs. 505-547
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • The purpose of this study is to evaluate the impact of the expected cash flows and cost of capital on expected returns on equity in the accepted companies listed in Tehran Stock Exchange. The variables in this research include expected return on equity (dependent variable), expected cash flows, cost of capital and fluctuations in expected cash flows resulting from cost of capital as independent variables and size of the company, dividends, the arbitrary variable of profit appropriation, return on equity, accruals and financial leverage ratio as control variables. This is a causative analytic study and also a library research. The sampling method here is systematic omission (filtering). In this study the financial data of 109 listed companies in Tehran Stock Exchange in the period of 1387 to 1392 have been reviewed (654 firm year). The results of the study in relation with first hypotheses approval indicated the significant and direct effect of expected cash flows on expected returns on the company shares. By the same token, considering the analysis conducted regarding second hypothesis of the study, the results revealed the direct and significant effect of cost of capital on the expected return on company shares and eventually, considering the analysis conducted regarding the third hypotheses of the study the results revealed the direct and significant effect of expected cash flows fluctuations resulted from cost of capital on expected returns of the company shares.