Document Type : Research Paper
Abstract
In companies with low growth opportunities, rational Managers will pay to replace assets while overconfidence Managers, The overestimation expected future cash flows of projects that actually have a negative net present value, attempted to accept them. This difference in opinion would be different consequences of over investment and abnormal returns. This article aimed to study Investigate the Impact of changing the attitude of management overconfidence to rational management on stock returns in Companies listed on Tehran Stock Exchange. The 138 companies are selected by systematic elimination method from the companies listed in Tehran stock Exchange during the years of 2006 to 2015. Also, to measure abnormal returns of the Fama - French model and for to measure overconfidence of the methods based on the amount of investing is done, are used. The results show that changing the attitude of management overconfidence to rational management, increase normal returns and increase abnormal returns Also in firms with high growth opportunities, with at changing management, as expected, an increase in efficiency have been normal and abnormal returns. Also, by changing the attitude of management in companies with low growth, the level of stock normal return has increased significantly, While abnormal returns on this correlation is not significant.
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