International E-publication: Publish Projects, Dissertation, Theses, Books, Souvenir, Conference Proceeding with ISBN.  International E-Bulletin: Information/News regarding: Academics and Research

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

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)


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.


  1. Shaker Taheri S.H., Evaluating The Justification Rate Using Capital Increase Method to Financially Being Supplied and its effect on return of Tehran Stock Exchange Listed Companies, M.A. thesis, University of Tehran, (1999)
  2. Jamali F., Evaluating The Relationship Found Between Capital Structure (Financial Leverage) and Cash Flow Statement, M.A. thesis, Alzahra University, (2003)
  3. Scot M. and Petty K., Prentice Hall, Basic Financial Management, (1999)
  4. Myers S.C., The Capital Structure Puzzle, The Journal of Finance, Papers and Proceedings, Forty-Second Annual Meeting, American Finance Association, San Francisco, CA, 39(3), 575-592 (1984)
  5. Masulis R.W., the Impact of Capital Structure Change on Firm Value: Some Estimates, the Journal of Finance, 38(1), 107-126 (1983)
  6. Penman S.H. and Nissim, D., Financial Statement Analysis of Leverage and How It Informs About Profitability and Price-to-Book Ratios, (2001)
  7. Nielsen A.E.B., corporate governance, Leverage and Dividend Policy, Princeton University, Department of Economics, (2005)
  8. Qureshi M.A., System Dynamics Modeling of Firm Value, Journal Of Modeling In Management, 2(1), 24-39 (2007)
  9. Aggarwal R. and Zhao X., the Leverage–Value Relationship Puzzle: An Industry Effects Resolution, Journal of Economics and Business, 59(4), 286-297 (2007)
  10. Ghosh S. and Ghosh, I., Do Leverage, Dividend Policy And Profitability Influence The Future Value of Firm Evidence from India, (, (2008)
  11. Ahmed H.J.A., the Impact of financing decision, dividend policy, corporate ownership on firm performance at presence or absence of growth opportunity: a panel data approach, evidence from kuala lumpur stock exchange, Journal of Banking and Finance, 21st Australasian Finance and Banking Conference, (2008)
  12. Ebadi Dolatabadi M.K., Evaluating the Effect of Financial Supply Methods (External Resources) On Return and Price of Stock of Tehran Stock Exchange Listed Companies, M.A. thesis, University of Mazandaran (2002)
  13. Hassanpour Bahabadi D., Evaluating The Relationship Between Capital Structure Variations and Value Variations of Tehran Stock Exchange Listed Companies, M.A. thesis, University of Tehran, (2005)
  14. Modarres A. and Abdollahzadeh F., Financial Management, the Commerce Printing And Publishing Company, , 143 (2011)
  15. Miller M.H. and Modigliani F., Dividend Policy, Growth and the Valuation of Shares, Journal of Business, 34(3), 411–433 (1961)