Product Market Competition and Its Effect on Three Important Criteria in Decision Making, Agency Cost, Capital Structure and the Cost of Capital

Document Type : Review Paper

Authors

1 Assistant Professor of Accounting, Tarbiat Modares University

2 Ph.D. Student of Accounting, University of Tehran

3 Master of Financial Management, Mazandaran University

Abstract

Abstract is as below:
Abstract is as below: Abstract is :Product market competition can have effect on many factors in the company and this affect perform significant role in Managers and investors' decision making. Therefore, the present study examines how product market competition effect the Agency cost, capital structure and cost of capital corporations in Tehran Stock Exchange. The researcher has used Herfindhal-Hirschman index to measure product market competition, Agency cost of turning assets ratio, capital structure as the total debts to total assets and the cost of capital was calculated using the weighted average cost of capital. After investigating the hypothesis of the research at the period of 1388 to 1393, the number of 90 companies was evaluated. The results show that there is a negative relationship between product market competition, capital structure and the cost of capital. but there is no relationship between product market competition and capital structure.

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Main Subjects

References

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History

  • Receive Date: 09 December 2015
  • Revise Date: 12 March 2017
  • Accept Date: 21 September 2016

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