This paper presents an empirical investigation to study the effect of financial flexibility on capital structure decisions on selected firms listed in Tehran Stock Exchange over the period 2006-2018. The results indicate that the cash value of the previous years had no meaningful relationship with the current year's financial leverage, which suggests that flexibility in previous years could not explain the financial leverage of the coming years and financial leverage of companies changes did not occur based on the past years performance. When the ultimate value of financial flexibility is high, the impact of different variables, for example, profits, depreciation, and depreciation costs, fixed assets, etc., on leverage is of little importance, with a slight change in leverage. Companies with a high final value of financial flexibility are willing to maintain their current debt capacities, but it is significantly possible that they target deliberate or temporary deviations from their leverage ratios.
Purpose of the study: The paper discusses the emergence of institutional investors as owners of capital in corporate governance are increasingly important. Institutional shareholders have the potential to influence management activities through an exchange of shares indirectly and directly respectively Methodology: On the basis of this study, 42 companies between the years 1389 to 1393 were studied (data for 1388 also is intended to assess the results of 1389). Results: The panel data model relationship between institutional investors with stock prices and the risk of concurrent fall in share prices was determined and it was found that institutional investors and significant negative correlation with share prices and the risk of concurrent fall in prices in the stock market Tehran. Applications of this study: This research can be used for the universities, teachers, and students. Novelty/Originality of this study: In this research, the model of Synchronization of Stock Price and the Role of Institutional Investors in the Tehran Stock Exchange is presented in a comprehensive and complete manner.
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