This research is aimed to study the relationship between good governance and Cost of Capital in Tehran Stock Exchange . Hence , the six criteria suggested by World Bank as good governance have been used . Sampling population of the present study includes 95 accepted companies in Tehran Stock Exchange and manufacturing parts in the time period of 2005 - 2014. Based on the results of this study , the relationship between government effectiveness , Regulatory quality, control of Corruption and political instability and Cost of Capital is meaningful and positive . Also, the findings indicate that the relationship between accountability and rule of law and cost of capital is not meaningful . With regard to the positive effect of the four indicators of good governance on stock price movement , it can be concluded that the criteria of good governance in the given period have not been met .