The Relationship between Corporate Governance and Information Asymmetry with Stock Returns in Companies Listed in Tehran Stock Exchange

The present study investigates the relationship between corporate governance and information asymmetry with stock returns in companies listed in Tehran Stock Exchange. Indicators of free float, auditor type, institutional equity holdings, unincorporated membership maturity and company matter as corporate governance measures and proposed stock price split gap are considered as indicators of information asymmetry. Data from 94 firms accepted in Tehran Stock Exchange during the years 2008-2009 and multivariate regression models based on combined data were used. Findings of the research indicate that there is a significant and negative correlation between corporate governance and information asymmetry. On the other hand, there is a significant relationship between corporate governance indicators and information asymmetry, as well as the third hypothesis, information asymmetry and stock returns have a negative and significant relationship.