Investigating the Effectiveness of Future Earnings Prospects Stickiness of Conservatism and Managerial Max Ability Using Multivariate Linear Regression Model

Subject Areas : Financial engineering

Marjan Shahali ¹ , Mohammadreza Abdoli ²

1 - Department of Accounting, Shahroud Branch, Islamic Azad University, Shahroud, Iran
2 - Associate professor, Department of Accounting, Islamic Azad University, Shahrood Branch, Shahrood, Iran

Received: 2019-02-03 Accepted : 2019-02-27 Published : 2019-06-22

Keywords: Conservatism, Sticky dividends, stickiness of future earning prospects, managerial max ability,

Abstract :

The prospects for future earnings, its stickiness, and the cash returns of a company's shares, due to their objectivity and tangibility, are of particular importance to stockholders and capital market players in corporate analysis. Since the behavior and attitudes of executive managers are effective on the prospects of future earnings and its stickiness, in this research, the relationship between future income prospects stickiness and the two behavioral financial features include: conservatism and managerial max ability are investigated. The statistical population of this study includes 206 companies accepted in Tehran Stock Exchange during the period of 2009-2017 which have been tested using multivariate linear regression using Eviews software. The results of the research indicate that there is a meaningful positive relationship between the two criteria and the stickiness of  the future earning perspective.