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INVESTIGATING RELATIONSHIP BETWEEN CONSUMER PRICE INDEX AND PRODUCER PRICE INDEX AND DIVIDEND PER SHARE (CASE STUDY: Accepted Firms in Tehran Stock Exchange in 2001-2009)

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Author(s): Mohammadjavad Sheikh | Mohsen Nazem Bokaei | Hadi Alijani | Mohammad Saadatmand | Sayed Mojtaba Hosseini Fard | Ismaeil Chezani Sharahi

Journal: Australian Journal of Business and Management Research
ISSN 1839-0846

Volume: 1;
Issue: 7;
Start page: 121;
Date: 2011;
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Keywords: dividend per share | consumer price index | producer price index | Dicky- Fuller Test | Granger-causality test

ABSTRACT
Managers of economic institutions should possess some criteria in the stock exchange so that they can evaluate their performance and economic plans. Criteria for performance evaluation accounting can be used for evaluating performance and economic plans. One of the main criteria for performance evaluation accounting is reported accounting profit or dividends. This criterion is one of the main indexes for evaluating managers’ performance, and it is also a main criterion for decision-making on approval or rejection of economic plans. This index is influenced by different factors such as price index, especially consumer price index and producer price index. In this paper, relationship between producer price index and consumer price index is investigated in accepted firms in Tehran stock exchange. Dicky- Fuller Test is used for time series reliability and Pearson correlation coefficient and Granger-causality tests are used for investigating the relationship between variables. Finally, it was concluded that consumer price index has an inverse correlation with dividend per share (first hypothesis), and producer price index has a direct correlation with dividend per share (second hypothesis).
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