Examining of financial decisions, market timing and real investment on Tehran Stock Exchange

In financial economics, there are two theories, market timing theory (composition financing) and real investment-based theory (net financing), about relation between corporate finiancing and stock returns. Two theories predict significantly the negative relationship, but with different explanation. Using CAMP and Fama and French (1993) models and sample contain 78 of active company on Tehran Stock Exchange (TSE), we examine these two theories. The results indicat on the base of CAPM there is significantly positive relation between net and composition finiancing and stock returns but on the base of Fama and French that there is significantly negative relation between net and composition finiancing and stock returns. Also, when we use net and composition financing, together, there is there is significantly relation between the net and composition finiancing and the stock returns.