Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed Companies
Debt capacity means the amount of debt in which a company can pay its obligation without any shortage of funds. In this paper all the Tehran Stock Exchange (TSE) listed companies have surveyed for the year from 2005 to 2009. The purpose of this paper is to provide empirical support for micro-economi...
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| Format: | Article |
| Language: | fas |
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University of Tehran
2013-07-01
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| Series: | بررسی‌های حسابداری و حسابرسی |
| Subjects: | |
| Online Access: | https://acctgrev.ut.ac.ir/article_35524_a8681e909ec9f566c3099bfc2c8b514e.pdf |
| _version_ | 1828220434787598336 |
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| author | Saeedi Saeedi Abesht Abesht |
| author_facet | Saeedi Saeedi Abesht Abesht |
| author_sort | Saeedi Saeedi |
| collection | DOAJ |
| description | Debt capacity means the amount of debt in which a company can pay its obligation without any shortage of funds. In this paper all the Tehran Stock Exchange (TSE) listed companies have surveyed for the year from 2005 to 2009. The purpose of this paper is to provide empirical support for micro-economic theory respecting debt capacity and to develop a practically useful model for assessing debt capacity for firms seeking to minimize credit risk and the cost of debt. Theoretically important factors explaining the variation in debt capacity are identified and tested, namely: the proportion of property, plant and equipment over total assets, industry group (highlighting asset specificity), sales, market value, and debt ratio of previous financial year. The model developed provides a basis for firms to assess their debt capacity. Firm’s whose actual debt to asset ratio is less than their debt capacity can borrow more if needed and if additional leverage is justified. Creditors can also use the estimated debt capacity when deciding the terms (including the interest rate) of extending credit. Investors can shy away from companies with very little or no unused debt capacity to reduce their portfolio risk. Data were collected from the TSE Disclosure Database. Using the Eviews software, this paper’s theoretically based constructs were tested by developing a Generalized Least Square (GLS) model |
| first_indexed | 2024-04-12T16:26:03Z |
| format | Article |
| id | doaj.art-e312ac2186434f52adb8721002dc591a |
| institution | Directory Open Access Journal |
| issn | 2645-8020 2645-8039 |
| language | fas |
| last_indexed | 2024-04-12T16:26:03Z |
| publishDate | 2013-07-01 |
| publisher | University of Tehran |
| record_format | Article |
| series | بررسی‌های حسابداری و حسابرسی |
| spelling | doaj.art-e312ac2186434f52adb8721002dc591a2022-12-22T03:25:22ZfasUniversity of Tehranبررسی‌های حسابداری و حسابرسی2645-80202645-80392013-07-01202436410.22059/acctgrev.2013.3552435524Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed CompaniesSaeedi Saeedi0Abesht Abesht1استادیار دانشکدۀ مدیریت و علوم اجتماعی دانشگاه آزاد اسلامی، واحد تهران شمال، ایرانکارشناس ارشد حسابداری، دانشکدۀ مدیریت و علوم اجتماعی دانشگاه آزاد اسلامی، واحد تهران شمال، ایرانDebt capacity means the amount of debt in which a company can pay its obligation without any shortage of funds. In this paper all the Tehran Stock Exchange (TSE) listed companies have surveyed for the year from 2005 to 2009. The purpose of this paper is to provide empirical support for micro-economic theory respecting debt capacity and to develop a practically useful model for assessing debt capacity for firms seeking to minimize credit risk and the cost of debt. Theoretically important factors explaining the variation in debt capacity are identified and tested, namely: the proportion of property, plant and equipment over total assets, industry group (highlighting asset specificity), sales, market value, and debt ratio of previous financial year. The model developed provides a basis for firms to assess their debt capacity. Firm’s whose actual debt to asset ratio is less than their debt capacity can borrow more if needed and if additional leverage is justified. Creditors can also use the estimated debt capacity when deciding the terms (including the interest rate) of extending credit. Investors can shy away from companies with very little or no unused debt capacity to reduce their portfolio risk. Data were collected from the TSE Disclosure Database. Using the Eviews software, this paper’s theoretically based constructs were tested by developing a Generalized Least Square (GLS) modelhttps://acctgrev.ut.ac.ir/article_35524_a8681e909ec9f566c3099bfc2c8b514e.pdfdebt capacityDebt RatioCapital structure |
| spellingShingle | Saeedi Saeedi Abesht Abesht Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed Companies بررسی‌های حسابداری و حسابرسی debt capacity Debt Ratio Capital structure |
| title | Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed Companies |
| title_full | Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed Companies |
| title_fullStr | Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed Companies |
| title_full_unstemmed | Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed Companies |
| title_short | Factors Explaining Debt Capacity in Tehran Stock Exchange (TSE) Listed Companies |
| title_sort | factors explaining debt capacity in tehran stock exchange tse listed companies |
| topic | debt capacity Debt Ratio Capital structure |
| url | https://acctgrev.ut.ac.ir/article_35524_a8681e909ec9f566c3099bfc2c8b514e.pdf |
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