The Relation between Asset Growth and Stock Returns in Manufacturing

This study is to identify the variables effective on the return and price of stocks of those firms listed in Tehran Stock Exchange. There exist different models such as capital asset pricing model, market model, arbitrage pricing and factor model to predict stock returns. Researches made about the modelsʹ prediction power indicate that there exist variables with a power to predict returns better than beta (B). Therefore, the present survey tries to examine the relationship between the variables in the Fama and French model in addition to the asset growth. The results show that the developed model of Fama and French has more explanatory power than Fama and French model.