In management's attempts and decision-making to increase shareholder value as measured by the market value of a company, they continuously influence, directly of indirectly, those variables that affect shareholder wealth. While there may be legitimate differences of opinion as to whether this is the sole motivation of a firm's management, it should without a doubt be a dominant variable in management's decisions. It is widely accepted that the primary objective or goal of a firm is to maximise the shareholders' equity. In addition, non-board members’ duty had not impact on firms’ value before and after privatization process, institutional investors did not play important role before and after privatization process, and separations played important role on firms’ value before and after privatization occurred. The results of the survey indicate that the number of major shareholders has been reduced after privatization process accomplished, the number of shares had no impact on firms’ values. We collect the necessary information before and after privatization process completed and using a regression model examined the main hypothesis as well as five sub-hypotheses. The main hypothesis of this survey studies whether there is a meaningful relationship between ownership structure and enterprise value of privatized firms. The proposed study of this paper selects eleven relatively big sized Iranian firms whose structures were privatized prior year 2011. In this paper, we present an empirical investigation to measure the effects of privatization on some selected firms listed on Tehran Stock Exchange. However, the results of the second model do not confirm the last two hypotheses. Using two regression models, all these hypotheses are investigated and the results of the survey confirm a meaningful relationship between residual income and dividend per share, value added operating cash flow, value added cash flow. The study uses two regressions analysis and examines five hypotheses including the relationship between residual income and other factors including dividend per share, value added operating cash flow, value added cash flow, market cap and market value added. Finally, the information of the firms must be available for course of study. The study does not include the shares of holdings, banks, insurance firms. The other criterion associated with the proposed study of this paper is that shares of the selected firms must have been active during period of study and there must be no change in their fiscal calendar. We only concentrate on listed companies whose fiscal years started from March to May of each year. The proposed study of this paper gathers the financial information of all listed firms traded in Tehran Stock Exchange over the period of 2007-2011. During the past few years, there have been growing interest in learning the relationship between residual income and other financial figures such as dividend per share, market value and operating cash flow.

Meaning of residual income