The Relation between Capital Structure and Stock Abnormal Return

Subject Areas :

Ghazaleh saifi ¹ (PhD student, Department of Accounting, Faculty of Economics and Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran)
Roya Darabi ² (Department of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran )

Received: 2023-12-31 Accepted : 2024-02-04 Published : 2024-08-04

Keywords: Return, Cumulative Abnormal Return, Capital Structure, Book Leverage, Market Leverage,

Abstract :

The financial resources of companies are divided into two parts, internal financial resources and external financial resources, based on their financial policies. In internal financial sources, the company is financed from profit and in external financial sources from debts and shares. It is very important that how the companies proceed with financing in order to have the maximum positive effect on the profit and efficiency of the shareholders. The purpose of this research is to investigate the relationship between the way of financing (capital structure) and the abnormal returns of shares of companies listed on the Tehran Stock Exchange. The time domain of the research is from 2018 to 2022, where a total of 133 companies in 23 different industries formed the research sample. The present research is considered to be applied in terms of objective and descriptive-correlation method. To test the models, Chow's test was first used and it was determined that the panel method should be used, and then Hausman's test was used to use the random effects or fixed effects panel method. Finally, the fit of the presented model and the results of classical regression assumptions for the research models were stated. The results of the research show that there is an inverse and significant relationship between leverage and abnormal cumulative returns of companies, but there is a significant relationship between market leverage and abnormal cumulative returns of companies at the 95% confidence level. You are not visible.

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