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This study examines the implications of value-based financial measures such as return on equity, return on assets, market-value-added, and economic-value-added on the Dow Jones Industrial, Transportation, and Utilities company stock prices. It also examines stakeholder satisfaction on firm performan...
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| Format: | Article |
| Language: | fas |
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University of Tehran
2007-02-01
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| Series: | بررسیهای حسابداری و حسابرسی |
| Subjects: | |
| Online Access: | https://acctgrev.ut.ac.ir/article_18469_512b093ef8468fa3f1016989d14379e2.pdf |
| Summary: | This study examines the implications of value-based financial measures such as return on equity, return on assets, market-value-added, and economic-value-added on the Dow Jones Industrial, Transportation, and Utilities company stock prices. It also examines stakeholder satisfaction on firm performance using several financial proxies. Using cross-sectional data and regression analysis, the results indicate that all value-based performance measures have a significant relationship with prices. The results also show that stockholder satisfaction, measured by return on equity, has a strong and positive correlation with share values. Consumer satisfaction, measured by sales volume, also showed a strong relationship with stock prices. However, the significance of the relationship between bondholder satisfaction measured by the time-interest-earned ratio and prices varied from positive to negative and was insignificant. The effect of taxes as a proxy for corporate social responsibilities on share values was mostly insignificant. Overall, the results show that stock price maximization as the primary goal of a firm may lead to the satisfaction of stockholders and consumers. However the relationship between price maximization strategy and bondholders and society satisfaction require further investigations. |
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| ISSN: | 2645-8020 2645-8039 |