M.A. Thesis:

Investigating the relationship between ownership structure, financial leverage and company performance and stock price

In the ownership composition of most companies listed on the Tehran Stock Exchange, there are major shareholders who, in terms of the theory of strategic principles of companies, have the ability to exercise more oversight than individual shareholders. It is governmental (Rahimian et al., 2013). Institutional owners play a key role in monitoring companies' holdings on equity and also the extent of financial leverage.The owners (shareholders) of the company have different rights; One of these rights is the election of the board of directors, who act as a representative to monitor the market efficiency of the company's managers. Here, it is possible that institutional shareholders have control over the use of financial leverage by influencing managers. On the other hand, major shareholders play a significant role in transmitting information to other shareholders. They can obtain private information from management and pass the information on to others.The importance of discussing the structure of capital was further emphasized by Modigliani and Miller studies. They believed that there was no difference between equity financing and debt given the value of the company. Therefore, different financing methods for the company do not add value and therefore there is no limit for the manager; But later empirical evidence showed that this was not the case in practice. There is a lot of research on corporate financing that tries to explain how the capital structure affects the value of the company. Institutional investors, on the other hand, have considerable experience in collecting and interpreting information on market efficiency.Agency theory shows that the capital structure and the desired ownership structure can reduce agency costs. Therefore, it is predicted that the capital structure and ownership structure are related to financial decisions (Hosseini, Ismail, 2016). Financial ratios have always been used as indicators to compare as well as analyze and interpret the financial health of businesses and are a standard criterion for investment, managers and researchers to evaluate the performance of companies.Managers, investors and analysts need diverse yet efficient financial ratios to study capital markets, the most popular of which are: Current Ratio, Instantaneous Inventory, EPS, DPS, P / E. We are looking at whether financial ratios such as return on assets (ROA), stock returns (ROE) and financial leverage can explain the stock price fluctuations of listed companies, as well as whether these ratios are only capable in one industry. Explain the fluctuations of companies' stock prices or are used in other industries (Seyed Hassan Salenejad 1389)

Keywords: ownership structure -financial leverage - firm performance - stock prices