Investigating the Relationship Between Profitability Ratio, Capital Structure and the Rate of Stock Return

Subject Areas : Business Management

majid bagherzadeh khajeh ¹ , Asghar Feyzi ²

1 - Department of Management, Tabriz Branch, Islamic Azad University, Tabriz, Iran
2 - Master of Business Administration (Financial Orientation) from Aras-Tabriz Higher Education Institution

Received: 2007-06-30 Accepted : 2007-12-09 Published : 2008-02-20

Keywords: Rate of Stock Return, Profitability Ratio, Rate of Capital Structure,

Abstract :

The main purpose of this study has been to investigate if there is a significant relationship between the profitability ratio, capital structure, and the rate of stock return. To do this, first, a definition of the rate of stock return, profitability ratio, and ratio of the company’s  capital structure has been provided and then a t-test,   f-test and correlation computations have been calculated. The related data have been collected from the concrete companies which have been active in Tehran stock exchange for thee years. The population of this study includes all of the concrete companies  which have been accepted in Tehran stock exchange during the mentioned period. After selecting the related companies, we calculated the ratio by conducting a linear and non-linear regression. The results indicate that there is not a significant relationship between the ratio of profitability, capital structure, and the rate of stock return in concrete companies accepted in Tehran stock exchange during the years 1382- 1384.  

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