21Islamic Azad University of Gachsaran-Iran, Department of Commerce, University of Mysore, Mysore, India
22Department of Commerce, University of Mysore, Mysore, India
Since the ultimate purpose of investors in stock market is to increase their wealth, and one of the ways to increase wealth is increase in common stock value therefore providing some information that can help them in assessing business activities and abilities, and selecting favorable company for investment, is necessary.
In this paper we try to study the factors that can affect market capitalization in long term (among those we concentrate on dividend policy, debt level and investment grow) and we try to study and test the relationship between these financial variables with market capitalization of stock exchange companies of Tehran from 2002 to 2007.
The results showed that there is no meaningful correlationship between cash dividend ratio, debt ratio and capital expenditures growth with market capitalization and this shows that investors didn't pay much attention to the variables mentioned above in the assessment and selection of the company. In the other words, this financial variables have no information content in Tehran Stock Exchange.
Cash dividend ratio, Debt ratio, Capital expenditures growth, Market capitalization
