The pattern of capital increase and its role on abnormal stock returns in Tehran Stock Exchange member companies using the structural equation model

Document Type : Research Paper

Authors

1 Department of Accounting, Zahedan Branch, Islamic Azad University, Zahedan, Iran

2 Department of Accounting, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran

3 Assistant Professor, Department of Accounting, Islamic Azad University of Zahedan Branch, Zahedan, Iran.

10.22075/ijnaa.2023.30720.4473

Abstract

Financing patterns should minimize the weighted average of capital and maximize shareholder value. This study aimed to evaluate the factors affecting the financing model through a capital increase and its effect on abnormal stock returns. This mixed study was conducted based on interviews with 16 experts. Factors such as investment purposes of the capital increase, sources of the capital increase, and differences in the rules of the Tehran Stock Exchange, such as the scope of oscillation and characteristics of the company, are the essential components affecting the pattern of capital increase. In addition, the results of the qualitative analysis were measured by using the questionnaire tool and asking the opinions of 400 financial managers and university professors using the structural equation analysis method. The results showed that the investment objectives of the capital increase, the methods of increasing cash from shareholders and stock premium, and stock dilution significantly affected capital increase and, consequently, abnormal and negative stock returns.

Keywords

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Articles in Press, Corrected Proof
Available Online from 31 August 2023
  • Receive Date: 16 January 2023
  • Revise Date: 22 May 2023
  • Accept Date: 31 May 2023