The Relation between Characteristics of Predicted Earnings per Share by Management and Risk and Firm Value in Terms of Future Decision-Making

The firms that have provided a clear picture of their future are more widely accepted in the market. One of the ways to draw this picture is exposing the prediction of earning per share. This broadcast makes the capital market sure that firm provides information impartially. This study tries to examine the relation between the predicted earning by management and the firm value and risk. Sampling is done by systematic elimination method and regression analysis was used for testing hypothesis. Sample consists of 178 firms which are listed in Tehran Stock Exchange and their data were statistically analyzed during the years of 2007 to 2011; therefore، the sample size in this study is 1068. The results of logistic regression has shown that the firm reported prediction of earning per share is potentially considered by capital market، and the activists in this market would use these figures to decide in providence model for investing.