Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach

The aim of this study was to examine the effects of stock return volatility as indication of environmental uncertainty on working capital accruals. This study is the applied one and uses Ex-Post Facto approach. In this study, according to the real option-based investment approach, it was predicted t...

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Auteurs principaux:	Yuones Badavar Nahandi (Ph.D), Ramin Mahroomi
Format:	article
Langue:	FA
Publié:	Shahid Bahonar University of Kerman 2018
Sujets:	stock return volatility working capital accruals operating cycle financial distress real options investment Accounting. Bookkeeping HF5601-5689
Accès en ligne:	https://doaj.org/article/d6f066232ea341a99bdb443b04bd4384
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spelling	oai:doaj.org-article:d6f066232ea341a99bdb443b04bd43842021-11-04T19:53:27ZRelationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach2008-89142476-292X10.22103/jak.2017.10107.2365https://doaj.org/article/d6f066232ea341a99bdb443b04bd43842018-01-01T00:00:00Zhttps://jak.uk.ac.ir/article_1862_2ab0def3accd1f7d25e193c13ba1e1fd.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XThe aim of this study was to examine the effects of stock return volatility as indication of environmental uncertainty on working capital accruals. This study is the applied one and uses Ex-Post Facto approach. In this study, according to the real option-based investment approach, it was predicted that high stock return volatility would reduce working capital accruals. A sample of 108 companies listed in the Tehran Stock Exchange in the period 2011 to 2014 has been selected to test the hypothesis. To compute some variables, the data of the years 2010 and 2015 have also been collected. The results showed that there is a negative relationship between the volatility of stock returns and working capital accruals, and financial distress of firms reduces the explanatory power of the relationship. One of the main reasons for reduction of the explanatory power of the negative relationship under financial distress could be the motivation of the transfer of risks by investors. Also, contrary to what was anticipated, high operating cycle does not increase the power of negative relationship between stock return volatility and working capital accruals.Yuones Badavar Nahandi (Ph.D)Ramin MahroomiShahid Bahonar University of Kermanarticlestock return volatilityworking capital accrualsoperating cyclefinancial distressreal options investmentAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 8, Iss 4, Pp 93-118 (2018)
institution	DOAJ
collection	DOAJ
language	FA
topic	stock return volatility working capital accruals operating cycle financial distress real options investment Accounting. Bookkeeping HF5601-5689
spellingShingle	stock return volatility working capital accruals operating cycle financial distress real options investment Accounting. Bookkeeping HF5601-5689 Yuones Badavar Nahandi (Ph.D) Ramin Mahroomi Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach
description	The aim of this study was to examine the effects of stock return volatility as indication of environmental uncertainty on working capital accruals. This study is the applied one and uses Ex-Post Facto approach. In this study, according to the real option-based investment approach, it was predicted that high stock return volatility would reduce working capital accruals. A sample of 108 companies listed in the Tehran Stock Exchange in the period 2011 to 2014 has been selected to test the hypothesis. To compute some variables, the data of the years 2010 and 2015 have also been collected. The results showed that there is a negative relationship between the volatility of stock returns and working capital accruals, and financial distress of firms reduces the explanatory power of the relationship. One of the main reasons for reduction of the explanatory power of the negative relationship under financial distress could be the motivation of the transfer of risks by investors. Also, contrary to what was anticipated, high operating cycle does not increase the power of negative relationship between stock return volatility and working capital accruals.
format	article
author	Yuones Badavar Nahandi (Ph.D) Ramin Mahroomi
author_facet	Yuones Badavar Nahandi (Ph.D) Ramin Mahroomi
author_sort	Yuones Badavar Nahandi (Ph.D)
title	Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach
title_short	Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach
title_full	Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach
title_fullStr	Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach
title_full_unstemmed	Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach
title_sort	relationship between stock return volatility and working capital accruals: a real option-based investment approach
publisher	Shahid Bahonar University of Kerman
publishDate	2018
url	https://doaj.org/article/d6f066232ea341a99bdb443b04bd4384
work_keys_str_mv	AT yuonesbadavarnahandiphd relationshipbetweenstockreturnvolatilityandworkingcapitalaccrualsarealoptionbasedinvestmentapproach AT raminmahroomi relationshipbetweenstockreturnvolatilityandworkingcapitalaccrualsarealoptionbasedinvestmentapproach
_version_	1718444622464679936

Relationship between Stock Return Volatility and Working Capital Accruals: A Real Option-Based Investment Approach

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