Application of Economic Value Added (EVA) In Stock Return Evaluation Of Accepted Oil Productions Companies In the Tehran Stock Exchange (TSE)

One of the most important goals of companies and profit making organizations is gaining interest in short term and increasing shareholders’ wealth in long term. Achieving these purposes should be done through proper decision making about financial issues like finance providing, the methods of using capital insideorganizations and investments out of the organization. Proper decision making needs performance evaluation through applying appropriate criteria and indices. TheCriteria of financial performance evaluation has a higher status than other criteria because of its practicality, objectivity and tangibility. One of the most importantfinancial criteria of active companies in stock exchange is stock return (SR) andstock investors have been seeking a way to predict it. Economic value added (EVA) is one of the most efficient criteria in evaluating quantitative explanation of stockreturn and one of the most important internal performance criteria. The purpose of the present research is to explain the relationship between EVA andstock return and comparing it with Net profit (NP) regarding effectiveness on stock return. This operation is done to evaluate efficiency rate of EVA in Iran capitalmarket for oil production companies. Coefficient of the relationship between net profit and stock return came 0.07 explaining higher power of net profit in explainingthe changes of stock return. The results of the study showed that EVA didn’t have ameaningful relationship with stock return because of Iran capital market in oil production companies sector. We should seek a better economic criterion to evaluate the stock return of these companies.

کلیدواژه ها:

Economic Value Added (EVA) ، Stock Return (SR) ، Net Profit (NP) ، Capital Cost (c) ، Opportunity Cost (OC)