The effect of risk and stock returns on the quality of profits of industries listed on the Tehran stock exchange

Abstract

PURPOSE: The present study examines the relationship between profit quality and return and risk.

DESIGN/METHODOLOGY/APPROACH: The research hypotheses are tested using a sample consisting of six industries listed on the Tehran Stock Exchange during the years 2014 to 2019 and using multiple regression based on the technique of integrated data and t-test.

FINDINGS: The findings indicate that there is a significant positive relationship between profit quality and return and investment risk. The first hypothesis of the effect of return and risk on the quality of profit is accepted and the second hypothesis rejected.

PRACTICAL IMPLICATIONS: The capital market, by directing stagnant micro-capitals to the production process, has played an important role in the economies of countries and acts as an important economic indicator. Therefore, it is necessary to pay attention to the basic decisionmaking principles of this type of market, especially in Iran, which has a young literature on this subject.