Review of the Relationship between Profit Dividend Stability and Fluctuations of Stock Price in Accepted Firms of Tehran Stock Exchange

The purpose of this study is to evaluate profit dividend stability in selected firms and also the proportion of cash profit percentage to earning per share (EPS) on stock price in Tehran stock exchange. Widespread view of effective factors on the stock price is impossible in this research and we review the relationship between profit dividend stability in firms of Tehran stock exchange and also we survey the percentage of cash profit ratio to profit of any stock on the stock price. In this research statistical society includes 48 firms and also, 1 period of 7 years (2004-2010). There are two hypotheses for the test: Hypothesis1; A significant relation exists between profit dividend stability and fluctuations of stock price firms. Hypothesis2; A significant relation exists between the percentage of profit dividend and fluctuations of stock price. So the first basis theoretical research perorated, also we test the over hypothesis with reference to Tehran stock exchange. Thus, for test hypothesis first, on the base of the standard of percentage profit dividend (DPS/EPS), selected 43 firms as a firms that have stable profit dividend policy. Also for test the second hypothesis, the first, calculated for total firms, percentage of profit dividend (DPS/EPS) in firms for those years for total firms. In next step for trust independent variables we used Durbin-Watson test and test periods (Runs). In the end, multiple regression run for perfection of tests of this research, So that , the results shows that there is a positive relationship between profit dividend stability and fluctuations of stock price, also positive relationship between percentage of profit dividend and fluctuations of stock price in accepted firms in Tehran stock exchange.

Keywords:

Dividend Stability , Percentage of Dividend , Fluctuations of Stock Price , Tehran Stock Exchange