Investigating the Relationship between Investment Opportunitiesand Investment-Cash Flow Sensitivity

Investment decisions are among the most important corporate financial decisions. Companies with discovering the factors effecting investment and through using them in order to achieve an optimum level of investment to produce maximum output. This help companies absorb profitable investment opportunities and satisfy their stockholders. Investment-cash flow sensitivity is one of the important issues in investment. The purpose of this study is to explore the relationship between investment opportunities and investment-cash flow sensitivity. In this study financial information of 80 companies listed in Tehran Stock Exchange during the period of 1387 to 1393 is investigated. Three criteria for investment opportunities are used that are the earnings per share on price per share, Market to book assets ratio, Market to book equity ratio. The results indicate that there is no significant relationship between the investment cash flow sensitivities and investment opportunities.