Investigating the Effect of Stock Price Valuation Anchors on Standard Unexpected Earnings

بررسی اثر لنگرهای ارزیابی قیمت سهام بر سود غیرمنتظره استاندارد

Fatemeh Jahandari, Amirhossein Taebi Noghondari and Hadis Zeinali
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Fatemeh Jahandari: Ph.D. Candidate, Department of Accounting, Ke.C., Islamic Azad University, Kerman, Iran.
Amirhossein Taebi Noghondari: Assistant Professor, Department of Accounting, Ke.C., Islamic Azad University, Kerman, Iran.
Hadis Zeinali: Assistant Professor, Department of Accounting, Ke.C., Islamic Azad University, Kerman, Iran.

Journal of Accounting Advances (JAA), 2025, vol. 17, issue 2, 125-164

Abstract: In financial markets, accurate and correct analysis of financial information is of particular importance for determining stock prices and plays a key role in predicting stock market trends. Sometimes, investors may be affected by cognitive biases due to time constraints, lack of information, and limited cognitive abilities. The impact of these cognitive factors on financial decisions, especially in the process of evaluating stock prices, is considered one of the most challenging areas in capital market analysis. While unexpected earnings can provide important and effective signals about the true state of companies, investors may not interpret this vital information correctly due to evaluation anchors and perceptual biases. Examining the interaction between investors' subjective perceptions and actual financial data can shed light on hidden and lesser-known aspects of their behavior. The aim of this study is to investigate the effect of stock price valuation anchors on standard unexpected earnings. In this regard, 157 companies listed on the Tehran Stock Exchange were studied during the period 2013-2022. EViews 13 software was used for data analysis and multiple regression analysis with panel data was used for model estimation. The findings showed that stock price valuation anchors have a significant effect on standard unexpected earnings. This bias causes changes in unexpected earnings estimates and investors' decisions. The results of this study highlight the importance of

Keywords: Stock price valuation anchors; standard unexpected earnings; cognitive errors; anchoring bias (search for similar items in EconPapers)
JEL-codes: D91 G12 G14 M41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jaccad:023588

DOI: 10.22099/jaa.2025.53229.250

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