Author/Authors :
Rostami، Moslem نويسنده Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran , , Javid، Driush نويسنده Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran , , Hemmat Far، Mahmoud نويسنده Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran ,
Abstract :
The present study aimed to investigate the effect of free float on the cost of equity capital in the companies listed in Tehran Stock Exchange (TSE). In this regard, the research hypothesis was developed to propose that ‘there is a significant relationship between free float and the cost of equity capital.’ A number of 65 companies listed in TSE were selected as the sample. The research hypothesis was examined using linear regression analysis and correlation coefficient. The results showed a significant positive relationship between free float and the cost of equity capital. This suggests that, although increased free float percentage may increase stock trading, it will increase the cost of equity capital in practice and affect shareholders’ assets.
