M.A. Thesis:

Nonlinear relationship between CEO power and capital structure

The main objective of this research is to investigate the effect of CEO's power on capital structure in companies accepted in Tehran Stock Exchange. In order to investigate this, the research hypothesis was based on a statistical sample consisting of 901 companies during the years 3092 to 3092 and tested using multivariate regression models. For this purpose, the financial leverage based on the book value and the market-based leverage are used as a representative of the capital structure. The results of this research show that the nonlinear relationship between CEO's power and financial leverage based on market value is not statistically significant. In contrast, the nonlinear relationship between the CEO's power and the book value-based leverage is confirmed. To justify these findings, it can be argued that when the CEO's orders are less powerful, the company uses more debt to meet the interests of shareholders and executives and to reduce the cost of free cash flow representation. However, when the CEO's power passes through a threshold, they will have more power to influence the levels of debt

Keywords: CEO's duplication, CEO's power, Book-based leverage, Marketbased leverage