aAssistant Professor, Accounting, Isfahan University, Iran
bAssistant Professor, Economic, Isfahan University, Iran
cMaster Student, Isfahan University, Iran
One of the most important elements of each economic activity is to provide the required financial resources which can be supplied through return on equity or debt. All studies indicate that all firms have the target leverage but the speed of reaching this leverage is unbelievably low. This has been led to studies on cost adjustments. The firm can increase external resources due to the profitable investment opportunities and the leverage can be adjusted by choosing of issuance of shares or debt. Phases of the project have a negative effect on the target leverage. Multiple-variable regression models were applied for testing the hypotheses. The effect of phases of investment projects confirms that limited companies in Iran issue shares in the primary stage of project and use debt for financing in the middle and final stage.
Capital Structure, Financial Deficit, Market-Timing, Large Investment Project, Ratio of Target Leverage, Adjustment Costs
