Investigation of relation between intrinsic value and return of stock in Tehran Stock Exchange

اقتصاد پولی مالی

Article 6, Volume 17, Issue 33, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i33.27306

Authors

Farzaneh Nassirzadeh^* ; Farhad Karimipour

Abstract

This study seek to examine performance of Feltham - Ohlsen (1995)valuation model at the Tehran Stock Exchange and is trying to identify relation between intrinsic company value and return. This model is trying to determine the intrinsic value of company using their book value. Statistical community of this study includes all TSE accepted companies and Statistical sample is including 37 TSE accepted companies from 3 different industry (Food and beverage industry other than sugar, Food industry and pharmaceutical products, Automotive Industry) and data for these firms are analyzed interval 1377 to 1386 using Time series-Cross sectional (panel data) regression model. Results show that the model above boldly dose’nt able to determine the intrinsic value of companies. But evidence shows that the companies that have more intrinsic value, earn more profits . According to the results of performance of this model can not completely rejected, but now using of this model in Tehran Stock Exchange is not recommended.

Keywords

Intrinsic company value; Fltham - Ohlsen (1995)valuation model; Predict of stock return; Market value