چکیده:
This research examines the effect of financial flexibility on the capital structure of companies listed on the Tehran Stock Exchange during the period from 1999 to 2007. Financial flexibility is defined through life cycle stages including birth, growth, and maturity, and multivariate regression methods were used to analyze the data. The results of this research show that companies in the birth stage tend to issue less equity and debt, and maintain balanced leverage ratios. Companies in the growth stage use debt financing and maintain high leverage ratios. Companies in the maturity stage rely on internal financing and maintain low leverage ratios. The findings of this research are consistent with the trade-off theory but do not match the pecking order theory regarding companies in the birth stage.
خلاصه ماشینی:
To specify the stages of birth, growth, and maturity, this researcher used indicators such as company size, monetary assets, retained earnings, operating cash flows, dividends paid, and credit rating11 in the form of decile grouping.
To specify the birth, growth, and maturity stages, variables such as company size, monetary assets, retained earnings, operating cash flows, and dividends paid are used.
Therefore, according to these expectations, the research hypotheses are stated as follows: First hypothesis: There is a significant negative relationship between positive retained earnings and leverage ratios.
To test the third and fourth hypotheses, regression model number (2) was used, whose variables are as follows: OCF: three-year moving average of operating cash flows divided by the market value of total assets minus its industry median18, D^OCF+: if the company has positive OCF, its value will be one, otherwise its value is zero, D^OCF-: if the company has negative OCF, its value will be one, otherwise its value is zero.
Furthermore, companies with high retained earnings are in the maturity stage and rely on internal financing; therefore, according to Bion's model, in order to identify companies in each of the life cycle stages, namely birth, growth, and maturity, first, all sample companies were categorized into deciles24 based on the retained earnings ratio, and then the average retained earnings, company size, monetary assets, three-year weighted average operating cash flows, and dividends paid were calculated for each decile.
Therefore, companies in the maturity stage with characteristics of retained earnings, operating cash flows, high dividend payments, and large size, maintain low leverage ratios.
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