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Income Smoothing and stock price performance in financial crisis.
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Hossien Etemadi *   1, Leila Abdoli |
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Abstract: (11904 Views) |
| The main purpose of this research is to consider the relationship between income smoothing and stock price performance (measured by return stock and abnormal returns stock) in financial crisis. Using Information in the financial statements of 71 the financial crisis companies and 71 the financial non-crisis companies during the period 2004 to 2014. Income smoothing was measured through correlation of a firm's change in discretionary accruals with earnings changes before in discretionary accruals. Criteria for the classification of financial crisis companies include: (1) three consecutive years of losses report, 2. dividend every year over the previous year more than 40% declined and 3. Article 141 of the Commercial Code. To test research hypothesis multivariate regression models is utilized. The result show that the financial non-crisis companies, there is significant negative relation between income smoothing with return stock and abnormal return stock, However, the financial crisis companies, there is significant positive relation between income smoothing and return stock, but there is no significant relation between income smoothing and abnormal return stock. |
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| Keywords: income smoothing, stock price performance, financial crisis. |
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Full-Text [PDF 1089 kb]
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Type of Study: Research |
Subject:
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