Open AccessEvaluation of the Effect of Company's Life Cycle on the Cost of Equity
Author(s) -
Mehdi Maranjory,
Samira Keykha
Publication year - 2016
Publication title -
modern applied science
Language(s) - English
Resource type - Journals
eISSN - 1913-1852
pISSN - 1913-1844
DOI - 10.5539/mas.v10n12p241
Subject(s) - shareholder , recession , business cycle , cost of equity , business , economics , econometrics , actuarial science , cost of capital , finance , macroeconomics , microeconomics , profit (economics) , corporate governance
The aim of this study is to investigate effect of company's life cycle on cost of stockholders , in this regard, three hypotheses were developed that a sample of 118 companies during the period of 2009 to 2015 were selected in order test them and regression model and panel data was used to analyze hypotheses. In this study, Dickinson (DeAngelo et al., 2006; Dickinson, 2011; Rahmanian, Moghaddam et al., 2014) company life cycle criteria has been used to separate companies to different steps of company life cycle and the Gordon growth model has been used to measure cost of stockholders. The results show that the cost of stockholders has significant difference with each other in mature phase of Company life cycle Compared with recession of company's life cycle. The results also show that cost of stockholders have significant difference with each other compared with recession of company's life cycle in the growth stage of companies life cycle . Finally, the results show that cost of stockholders have significant difference with each other in the Company life cycle birth and decline compared with the record of company's life cycle.