Investigating the effect of capital structure on the liquidity of shares of companies in the Tehran Stock Exchange during the years 84-88.

Number of pages: 95 File Format: word File Code: 31117
Year: 2013 University Degree: Master's degree Category: Economics
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  • Summary of Investigating the effect of capital structure on the liquidity of shares of companies in the Tehran Stock Exchange during the years 84-88.

    Dissertation for Master Degree (M.A)

    Treatment: "Production"

    Abstract:

    The implementation method in this research, which is applied in terms of purpose and descriptive-analytical in nature, the research hypotheses were expressed in two formats, descriptive statistics and regression model, and spss was used for calculations.

    The main purpose of this research is to investigate the effect of capital structure on the liquidity of listed companies It is listed in Tehran Stock Exchange. And in this regard, the hypotheses of the research are as follows.

    The main hypothesis: "The capital structure has an effect on the liquidity of the companies admitted to the Tehran Stock Exchange". It can be claimed that the capital structure has no effect on the liquidity of the companies accepted in the basic metals, cement and automobile and parts industries of the Tehran Stock Exchange. Therefore, based on the findings of the hypotheses, it can be claimed that during the research period, there is no positive relationship between the capital structure and the liquidity of the companies accepted in the cement, automobile, parts and basic metals industries of the Tehran Stock Exchange, so it can be claimed that the capital structure affects the liquidity of the companies accepted in the stock exchange. Tehra's securities are not affected during the period 2014 to 2016. According to the rejection of the sixteen sub-hypotheses and the confirmation of the two sub-hypotheses proposed for this hypothesis, we can answer this hypothesis that the 70% certainty of the capital structure did not affect the liquidity of the companies admitted to the Tehran Stock Exchange during the research years 1384 to 1388. Therefore, the results of this research are in line with the results of the research of Tassaran and Salvati and the research of Myers and Rajan (1998) and Morlek and Arvan (2001), which shows that there is no relationship between capital structure and liquidity.

    Capital structure has been proposed as the most important parameter affecting the valuation of companies and for their direction in the capital markets. (Douglas, 2001). Companies need capital for growth and development. A part of the capital inside the company is provided through the accumulated profit that has been created as a result of the company's profitability and has not been divided among the shareholders, and the rest can be created through the capital financial markets or borrowing. A company that does not have any debt, its capital structure is formed by the rights of the capital owners, and since the capital structure of most companies is combined with debt and capital, therefore, financial managers are very sensitive and accurate in receiving loans, its effects and maximizing the wealth of shareholders. And considering that investors invest in certain stocks based on different criteria, while comparing different types of stocks, the stock price of companies is one of the most obvious investment criteria that shows the company's credit for investment, which is actually the company's credit for investment. Therefore, comparing the credit of the company is one of the ways to improve investment. By knowing the factors affecting the price of the company's shares, they predict the price changes and changes in the company's value, and based on that, they make the necessary decisions to buy or not buy shares (Pourhydari, Omid, 1374). How much of the capital structure should be debt and how much of it should be equity, so as to ultimately minimize (financing cost) or (capital cost) and increase the market value of companies' shares as an (optimal capital structure), has been a major and important issue for a long time. The environment in which companies operate is a very competitive environment. Research in the field of capital structure has shown that the optimal capital structure can increase the company's competitive power in the market. Also, the increase in competitiveness has caused the entry of operating cash flows into the business unit, and as a result, the need for borrowing has decreased, and hence the capital structure of the company is also improved. (Smith et al., 2008).

    Financing and investment decisions in firms are both forward-looking.In financial decisions, the company uses the desired funds in the present so that it can fulfill its obligations to the suppliers of financial resources in the future. The financing sources of companies are divided into two parts "internal financial resources" and "external financial resources" based on their financing policy. In internal financial sources, the company finances from the earned profit, that is, instead of dividing the profit among shareholders, it uses the profit in the main operational activities of the company to obtain more returns, and in external financial sources, it finances from debts and shares. 1-3) Stating the necessity and importance of the issue. In general, the capital structure of companies consists of two parts: first, the amount of capital required and second, the combination of sources of financing. finance In general, loans and shares are the two main groups that shape the capital structure. According to the sources of financing, companies have different returns and risks in the field of capital markets. Therefore, the decisions related to the capital structure will have an effective role in the efficiency and credit of the companies with the capital providing institutions. The environment in which companies operate today is a growing and highly competitive environment, and in order to survive, companies have to compete with several factors at the national and international level and expand their activities through new investments, and companies need financial resources for investment, but financial resources and their use must be well determined so that the company can be profitable, and it is the duty of the financial manager to determine the sources of financing and how to use them. But the financial manager must always be careful that the method of financing is compatible with the type of investment of the company and also use the leverage to a reasonable extent in order to maximize the value of the company and avoid the adverse consequences of financial risk through the use of debt. Today, the rating of companies in terms of credit is largely dependent on their capital structure, and in fact, the basis of production and service provision is related to the way of providing and consuming financial funds. The capital structure of each company is an early warning about the financial distress of the company, and it is necessary to pay serious attention to determining the factors affecting the efficiency of their financing in the strategic planning of companies. On the other hand, the main role of success in business is determined by competitive power, and companies compete to increase their return on investment, consolidate their position in the market, remove their competitors, and seize market power. (Smith and others, 2008)

    The puzzle of capital structure is considered one of the most important issues of financial management and it is even more complicated than the puzzle of dividends (Abdollahzadeh, 2013). Because the information of the managers in the field of capital structure is very little and it is still not known on what basis the companies issue securities involving debt, ownership or mixed. Capital structure has been proposed as the most important parameter affecting the valuation and orientation of economic enterprises in the capital markets. The current evolving and changing environment has made the rating of companies in terms of credit somewhat dependent on their capital structure and has made their strategic planning necessary in order to select effective resources to achieve the goal of "maximizing shareholders' wealth". Tehran.

    1-4-2) Sub-objectives

    1 To know the relationship between capital structure and liquidity of cement companies accepted in Tehran Stock Exchange.

    2 To know the relationship between capital structure and liquidity of cars and parts accepted in Tehran Stock Exchange.

    3 To know the relationship between capital structure and liquidity of basic metals accepted in Tehran Stock Exchange.

  • Contents & References of Investigating the effect of capital structure on the liquidity of shares of companies in the Tehran Stock Exchange during the years 84-88.

    List:

    Chapter One: Statement of generalities. 1

    1-1) Introduction 3

    1-2) Statement of the problem 3

    1-3) Statement of necessity and importance of the subject. 4

    1-4) research objective. 5

    1-4-1) The main goal. 5

    1-4-2) Sub-goals. 5

    1-5) research questions. 5

    1-5-1) The main question. 5

    1-5-2) Sub questions. 5

    1-6) research hypotheses. 6

    1-6-1) The main hypothesis. 6

    1-6-2) Sub-hypotheses. 6

    1-7) research area. 6

    1-7-1) Research timeline. 6

    1-7-2) The spatial territory of the research. 6

    1-7-3) Subject area. 6

    1-8) Conceptual and operational definitions of variables 6

    1-8-1) Relative price gap (conceptual definition) 6

    1-8-2) Relative price gap (operational definition) 7

    1-8-3) Number of stock turnovers (conceptual definition) 7

    1-8-4) Number of stock turnovers (Operational definition) 7

    1-8-5) Short-term debt ratio (Nov, 1373) 7

    6-1-8) Long-term debt ratio (Nov, 1373) 7

    1-8-7) Equity ratio (Nov, 1373) 8

    1-9) Research limitations. 8

    1-10) Dissertation structure 8

    Chapter two: theoretical foundations of research. 9

    2-1) Introduction 10

    2 2) Capital structure 10

    2-2-1) Importance of capital structure 11

    2-2-2) Definitions of capital structure 11

    2-2-3) Theory of capital structure 12

    2-2-4) Definition of financial management. 13

    2-2-5) Desired and optimal capital structure 13

    2-2-6) Capital structure criteria 15

    2-2-7) Factors affecting capital structure: 15

    2-2-8) Types of capital structure 17

    2-2-9) Theory of capital structure 17

    2-2-10) Factors affecting decisions Capital structure 26 2-2-11) Capital structure and cost of capital 29 2-2-12) How to measure capital structure 32 2-3) Liquidity. 42 2-3-1 Different measurements of liquidity. 34

    2-3-2) Factors affecting liquidity. 35

    2-4) Relationship between capital structure and liquidity. 40

    2-4-1) The positive effect of asset liquidity on leverage 40

    2-4-2) Negative and insignificant effects 41

    2-4-3) Asymmetry in the effect of asset liquidity on leverage 42

    2-5) Experimental background of the research. 43

    2-5-1) Internal research. 43

    2-5-2) Foreign research. 44

    The third chapter: research methodology. 47

    3-1) Introduction 48

    3-2) Research model. 48

    3-3) research method. 49

    3-4) research hypotheses. 50

    3-4-1) The main hypothesis. 50

    3-4-2) Sub-hypotheses. 50

    3-5) statistical population and sample 50

    3-6) scope of research (thematic, temporal, spatial) 51

    3-6-1) thematic scope: 51

    3-6-2) temporal scope: 51

    3-6-3) spatial scope: 51

    3-7) data collection methods and tools 51

    3-8) Data analysis method 51

    3-8-1) Descriptive statistics. 51

    3-8-2) Inferential statistics. 51

    3-8-3) scale of research variables. 52

    Chapter four: Analysis of findings 54

    1-4) Introduction 55

    4-2) Descriptive findings of research variables. 55

    4-3) Tests related to research. 56

    4-3-1) Kolmogorov Smirnov test. 57

    4-3-2) Durbin Watson test. 57

    4-3-3) Test of hypotheses 59

    4-4) Summary and summary of the results of the test of hypotheses 74

    Chapter five: conclusions and suggestions. 79

    5-1) Introduction 80

    5-2) Overview of the general research results. 80

    5-3) research findings. 80

    5-4) discussion and conclusion. 81

    5-5) suggestions based on results. 81

    5-6) Suggestion for future research. 82

    5-7) research limitations. 82

    Sources and sources 83

    Source:

    Persian sources

    Internal facts and researches

    The effect of capital structure on the profitability of companies in the years 1998 to 2002 in Ghanaian companies

    Agarol et al. Meliti

    Antonio et al., factors determining the capital structure of companies

    Arbabian and Safari Graili, the effect of short-term debt ratio and total debt-to-asset ratio and profitability of companies listed on the Tehran Stock Exchange

    Ariotiz 2007, factors affecting liquidity in the markets82

    Sources and sources 83

    Source:

    Persian sources

    Internal facts and researches

    The effect of capital structure on the profitability of companies in the years 1998 to 2002 in Ghanaian companies

    Agarol et al. Meliti

    Antonio et al. Factors determining the capital structure of companies

    Arbabian and Safari Graili, the effect of the ratio of short-term debt and the ratio of total debt to assets and the profitability of companies listed on the Tehran Stock Exchange

    Eriotiz 2007, factors affecting liquidity in emerging markets

    Brottoloti (2006) providing capital through the issuance of shares as the main source of liquidity in Market

    Foreign research

    Jaspedz et al., the relationship between capital structure and ownership in seven Latin American countries

    Hasanjani, (1386) The amount of liquidity traded by companies on the efficiency of the stock exchange

    Khormedin, 1387 Investigating the amount of liquidity of companies' shares in the stock exchange and its effect on capital structure

    Rajan and Zing Cess (1995) study of the effect between debt ratio and capital profitability in American companies. Reden and Wollen study the capital structure decisions of American companies during the years 1981 to 1990, which were financed through bonds. Critical costs of capital structure

    Salvati and Sessaran (2008) the relationship between financial leverage and liquidity of assets in the Tehran Stock Exchange

    Frendolong's study of the capital structure of 984 American companies between 1979 and 1983

    Frieder and Martel's study of the mutual effect of stock liquidity and capital structure of companies listed on the New York Stock Exchange between 1988 and 1983 1998

    Qabapour, (1373) Investigating the financing of companies through the issuance of company shares

    Qadiri Moghadam and Asadian, investigating the impact of interest coverage ratio with the capital structure of companies listed on the Tehran Stock Exchange

    Kester (1986) and Marand Velang (1988), investigating the effect between debt ratio and capital profitability

    Karadnez et al., investigating the determinants of capital structure in Companies listed on the Istanbul Stock Exchange in 1994 to 2005

    Lara and Meskutita, investigating the relationship between capital structure and profitability in 1995 to 2001

    Myers and Rajan (1998) existing costs that affect the liquidity of capital structure on companies.

    Meiser, Stewart (The puzzle of capital structure), Tajme Fahad Abdullahzadeh, Financial Research Quarterly, Year 1, Issue 2, 2013, pp. 71-90.

    Malkipour Gharbi (2007) The effect of using financial leverage on the return per share of companies listed on the Tehran Stock Exchange. and capital structure in companies listed on the Tehran Stock Exchange

    Namazi and Shirzadeh (1385) The relationship between capital structure and profitability of companies listed on the Tehran Stock Exchange

    Vald (1999) investigating the effect of debt ratio and capital profitability in Japanese and British companies

    Haddock and James investigating the method of capital financing in American companies during the 1980s to 1993

    Harris et al.(1990) The effect of final value or liquidation value and leverage on liquidity in global markets

    Site used:

    Official site of Tehran Stock Exchange

     

    Latin sources

    1. Durand David. Cos of Debtand Equity Funds For Business. Trends and problems of Measurements in the management of Corporate Capital.E Solomon (ed). New York 1959. PP.91-116

    2. Vanhorn. J. G. Financial Management and Policy Prentice – Hell. 1992.pp.

Investigating the effect of capital structure on the liquidity of shares of companies in the Tehran Stock Exchange during the years 84-88.