INVESTIGATING THE RELATIONSHIP BETWEEN THE QUALITY OF MANAGEMENT'S EXPECTED PROFIT AND EQUITY
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Abstract
Investing and using investment opportunities is very important for companies. On the other hand, profit quality plays a significant role in helping investment decisions. The main goal of this research is to examine the relationship between profit quality and cost of equity in companies. The statistical population of this research is all the petrochemical and information technology companies accepted in the Tehran Stock Exchange. In order to test the hypotheses of this research, four regression models have been used using the mixed method with random effects. The results of the estimation of these models show that there is a significant relationship between profit quality factors such as the quality of accruals, profit continuity, profit predictability and profit smoothing with the price-to-income ratio as the cost of equity of companies accepted in There is the Tehran Stock Exchange. In addition, according to the positive coefficient of the company's profit quality variables, it can be concluded that increasing the quality of accruals, continuity of profit, predictability of profit and smoothing of profit will increase the ratio of cost of equity and vice versa.
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