Abstract

Financing decisions is one of the important areas in financial management to increase shareholder’s wealth. To determine how managers achieve this object, it can say performance measurement of company. In this paper we have studied the issue of whether the capital-structure decision impacts firms’ performance. For this reason, we used 3 definition of capital structure in scope of book value to market value and 5 measures were assumed for financial performance. In this paper, we applied the data of 117 corporates in Tehran Stock Exchange (TSE) in a 5-year time horizon (2002-2007).Results of our study demonstrated that capital structure influences financial performance. The significance of the influence of capital struture on performance respectively is belonged to measures of adjusted value, market value and book value.

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