Mohamad Omid Akhgar; Hamze Zaheddoost
Abstract
The goal of my research is to explore relationship between the cost of capital and CEO turnover with an emphasis on investment opportunities in companies listed on Tehran Stock Exchange. By the expansion of companies, office's owners submit the company to managers. High cost of capital which stems from ...
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The goal of my research is to explore relationship between the cost of capital and CEO turnover with an emphasis on investment opportunities in companies listed on Tehran Stock Exchange. By the expansion of companies, office's owners submit the company to managers. High cost of capital which stems from a poor decision-making in the process of management, might lead on account of sufficient investment to overlook the investments opportunities. Therefore, in a course of assessing the performance of managing committee and decisions concerned them, it might be effective. This research is practical and descriptive-correlative, from the viewpoint of purpose and nature, respectively. In order to achieve my purpose, 188 companies which has been accepted among the Tehran Stock Exchange, during 1387 to 1394 on the basis of systematic sampling-deletion method and overally, in order to perform the analysis, 1504 firm-years is considered. In line with the previous efforts, two assumptions has been cited, and two models: The growth rate of the market value of the total assets and Tobin’s Q have been tested as the representative of investment opportunities. In order to trial the validity of assumptions, we made use of logical regression and compound data. Findings on the basis of Tobin’s Q illustrate that there is a positive and meaningful relationship between cost of capital and CEO turnover. This means that the cost of capital is the explanatory power of the replacement CEO. We also find out that the investment opportunity intensifies the cost of capital and the CEO turnover; however, in the model of growth rate of market value of the total assets, there was no sign between the cost of capital and the CEO turnover.
M. Araab Mazar Yazdi; R. Taher Khani
Volume 8, Issue 29 , April 2010, , Pages 97-113
Abstract
As a functional and economical procedure, the change of firm ownership into generalization, leads to a growth in firm fund and as a result, an Expansion in its commercial operation. The need for great funds in commercial units and the formation of corporation as a result, leaded to separation of ownership ...
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As a functional and economical procedure, the change of firm ownership into generalization, leads to a growth in firm fund and as a result, an Expansion in its commercial operation. The need for great funds in commercial units and the formation of corporation as a result, leaded to separation of ownership from manager firms, and so to a conflict among the managers and the owners. In recent years, corporate governance-including a network of connections among stockholders, managers, accountants, and other beneficiaries- has been posed as a decreasing factor of the great discrepancy among stockholders and also the segregation of ownership from commercial unit control. One of the most important factors which contribute to the control of management relationship is the board of director and its composition. As a result, it is of crucial importance to survey factors related to board composition and its effect on the firm operation.
The locative domain of this survey is the collection of listed Companies in Tehran Stock Exchange and its temporal domain lies between year1382 till 1386. On the basis of this, the chosen samples include 130 firms.
Considered questions in this research have been posed as six hypotheses. The result of hypothesis testing shows that corporate governance variables including the number of members of board, the number of its non-executive members and the number of major shareholders have no effect on the return on equity (ROE), but on the other hand, this variables affect Tobin’s. The results show that the number of board members has a negative and at the same time negligible effect on Tobin’s, but the nonexecutive members of board and the number of majority shareholders have positive and also insignificant effect on Tobin’s.
