The Relationship between Additional Working Capital and Stock's Excess Return in Tehran Stock Exchange Accepted Companies

This research explores the influence of additional investment inworking capital on stock’s excess return as stockholders’ index of Value creation. To do this، the effect of additional investment in cash holding and net operating working capital were examined individually. Sample of the study included 66 companies accepted in Tehran Stock Exchange between 2004- 2011 (1383-1390). Test of hypothesis was carried out by multiple regression analysis byEstimatedgeneralized least square (EGLS). The results show that there is a negative significant relationship between additional investment in net operating working capital and stock’s excess return. The results also indicate that in Leveraged companies، cash holding compared with additional investment in net operating working capital، increase shareholders’ wealth.