The effect of ownership structure and Financial Leverage of Listed Companies in the Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Phd of Accounting, Payame Noor University, Farsan Branch, Farsan, Iran

2 MSc of Accounting, Islamic Azad University, Farsan Branch, Farsan, Iran

Abstract

Financial Leverage plays a crucial role in investment decisions. Obtaining an appropriate cost rate is essential in determining the optimal financial structure of corporate particularly when gaining profit from operations is set as objectives. On the other hand, creditors consider the ownership structure of companies in estimating the risk of non-payment. Thus, the ownership structure influences financial leverage. The present study investigates the effect of ownership structure on financial leverage of listed companies in the Tehran Stock Exchange.
For this purpose, the financial information of 118 companies listed in the Tehran Stock Exchange during the years 1390 to 1394 using the panel data method was analyzed. The results showed that there is a reverse and significant relationship between institutional monitoring and financial leverage. The effect of institutional control and managerial ownership on financial leverage is positive and significant.

Keywords

References

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History

  • Receive Date: 11 October 2017
  • Revise Date: 06 January 2018
  • Accept Date: 24 January 2018

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