Comparison of the Price to Earnings Ratio before and after the Implementation of Corporate Governance in Companies Listed in Tehran Stock Exchange

The aim of this study was to compare the proportion of financial leverage in companies before and after the implementation of corporate governance in firms listed in the Tehran Stock Exchange. The research method was descriptive and causal-comparative. The population was all the accepted companies in Tehran Stock Exchange (cars and car fragments, petrochemicals, petroleum products, cement, pharmaceutical, home and sugar appliances) between years of 2010 and 2014 that 82 companies were selected based on Morgan table as a sample. Data were analyzed using independent t-test. Results showed that the average ratio of stock price to earnings per share in companies after the implementation of corporate governance had no significant difference with an average ratio of stock price to earnings per share before the adoption of corporate governance. Other findings showed that the average ratio of stock price to earnings per share in the companies that used corporate governance had no significant difference with an average ratio of stock price to earnings per share in companies that did not use the corporate governance.