Forward-looking information disclosure and Stock price response

All Management discussion and analysis (MD&A) produced worldwide contain statements referred to as prospective information. Forward-looking information or statements refers to information that has a future semantic burden. This information includes information about the company's future that may later be presented as historical information (actual results). Forward-looking information actually presents the manager's beliefs and expectations as factors affecting the company's performance and providing assumptions and assumptions to shareholders and investors. The primary purpose of this study is to investigate the effect of forward-looking information disclosure on stock price response. For this purpose, the data of 140 manufacturing companies listed on the Tehran Stock Exchange and Over-the-counter (OTC) stock market during the years 2005 to 2009 are analyzed through combined data. In order to investigate the effect of forward-looking information disclosure on stock price response, Olson (1995) model is used, and then through the Z Wong test, the significance of Olson (1995) model determination coefficients and the first hypothesis model are compared. In addition, to measure the disclosure of forward-looking information, the impact of forward-looking words is first examined by financial analysts following research (Hassanin and Hosseini, 2015). Then, using the Savara method, one of the multi-criteria decision-making methods, words influencing investors' decisions are weighted. The results of the first hypothesis show that the disclosure of forward-looking information in the studied samples did not have a high information load and did not cause a stock price reaction. The second hypothesis results show that the two criteria of external uncertainty (sales change coefficient and P/E change coefficient) positively and significantly affect the relationship between forward-looking information disclosure and stock price response. Besides, the results of the third hypothesis show that the uncertainty of the internal environment (profit volatility) has a positive and significant effect on the relationship between the disclosure of forward-looking information and the stock price response