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Evaluating Effects of Financial Leverage on Future Stock Value at Stock Exchange

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Author Affiliations

  • 1Department of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, IRAN
  • 2 Young Researchers Club, Tabriz Branch, Islamic Azad University, Tabriz, IRAN
  • 3 Young Researchers Club, Bonab Branch, Islamic Azad University, Bonab, IRAN
  • 4 Young Researchers Club, Shahre Rey Branch, Islamic Azad University, Shahre Rey, IRAN

Res. J. Recent Sci., Volume 2, Issue (2), Pages 81-84, February,2 (2013)

Abstract

The present study mainly aims at evaluating effects of financial leverage on future stock value (emphasizing industry type). This is an applied and correlation study considering objective and method, respectively. The research statistical population was consisted of those Tehran stock exchange listed active cement industry companies analyzed from 2005 to 2008. Research findings relying on correlation and regression analysis indicates inefficiency of financial leverage on future value of Tehran stock exchange listed companies. In other words, the criterion is not helpful in predicting future value and lacks significant explanatory power. Based on research results, considering financial leverage criterion, therefore, will not be useful in predicting future value.

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