A Model for Evaluating Stock of Companies Listed on Tehran Security Exchange (TSE)

Proper stock valuation is one of the most important issues to financial analysts, financial managers and investors. The purpose of this paper is to help the interested groups with required information for stock valuation. The sample of this study consists of 644 firm-years of companies listed on TSE since 2003 to 2009 year. Operating cash flows, earnings per share, book value per share, return on assets, assets turnover ratio, stock price at the beginning of the period, age of firm, size and industry type are the independent variables. The results of this research show that earnings per share and return of assets have adirect relationship with stock price. Results also show that firm’s stock price has a positive correlation with lagged stock price and it can be argued that the price of the stock is a continuum. Based on the results of this research the stock price is affected by the year of examination.