University of Economic Sciences,
Tehran
West Indies
Research Article
Impact of Firm Specific Factors on Capital Structure based on Trade off
Theory and Pecking Order Theory - An Empirical Study of the Tehrans
Stock Market Companies
Author(s): Maral Delghandi and Maral DelghandiMaral Delghandi and Maral Delghandi
The purpose of this paper is to examine determinant of capital structure of Iranian listed companies based on trade off theory and pecking order theory of capital structure. There are many factors that may affect capital structure choice. However, this study focuses on four important characteristics of Iranian firms and tries to clarify their impact on capital structure. The dependent variable is firm’s leverage ratio and independent variable consists of tangibility, profitability, growth and business risk. This study uses financial information of 133 Iranian listed companies on Tehran Stock Exchange for the period of 10 years from 2005 to 2014. The OLS regression model is used to determine relationship between dependent and independent variables. Finding show that profitability is the most important determinant of capital structure for Iranian companies followed by tangibility,.. Read More»
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