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The Investigation of the Effective Factors upon the Capital Structure of the accepted Companies in Tehran Stock Exchange

Author Affiliations

  • 1 Department of Accounting, Semnan branch, Islamic Azad University, Semnan, IRAN

Res. J. Recent Sci., Volume 4, Issue (1), Pages 68-72, January,2 (2015)

Abstract

Purpose – This study tries to help the senior financial managers to provide optimal capital structure and among different interior factors, focus their attention to profitability trend. Design/methodology/approach–The research design is comparative- deductive and according to the research and nature of the variables, is a practical research and methodologically is a comparative- analyzing and also a kind of case study. Findings – The results of the research indicate that, profitability is the only effective variable on the capital structure of companies in Iran, and the other factors are ineffective. According to these results, the companies which have higher profitability use more debt in their capital structure. And companies with lower profitability don’t have a good chance in financing through debt. The research's results indicate that the capital structure of different groups of companies in stock exchange is different. Research limitations/implications – The paper is limited to a comparative- deductive study that may have further implication for research such as: -Presenting one pattern for determining the companies optimal capital structure. -The reason of changes in capital structure of companies during their life. Originality/value – Since Capital structure or in other words, the combination of financial resources and its effective factors are every company's basic issues which should be considered by senior managers, especially financial managers, Investigation of the effective factors can also be practically and theoretically beneficial in Iran.

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