محمد قاسمی

The bankruptcy of large companies and financial distress of some firms in recent years highlight the growing need for more extensive and in-depth research in the field of financial distress. Additionally, considering that changes in a company's cost of capital, which is dependent on the firm's risk, are crucial when making investment decisions in securities for investors, the analysis of companies exposed to financial distress and the assessment of risk behavior are deemed essential. Therefore, this study aims to evaluate the impact of financial distress on stock returns, taking into account systematic risk and profitability as mediating variables for firms listed on the Tehran Stock Exchange during the years ۲۰۱۶ to ۲۰۲۱. The econometric method employed in this study utilizes a combination of data and linear regression. The study's results indicate that financial distress has a significant negative impact on stock returns. In other words, an increase in financial distress for each company in the Tehran Stock Exchange during the examined period has led to a decrease in the stock returns of that company. Thus, an increase in financial distress can potentially increase the stock returns of accepted companies .on the Tehran Stock Exchange