Abstract
The flexibility plays an important role in making the managers powerful in the regard of investment in the future. The problems of the capital market have necessitated the maintenance of flexibility for the companies for the purpose of using profitable opportunities. The present research has aimed to study the effect of financial flexibility on the financial behavior. The statistic sample used in the present study consists of 100 companies accepted in Tehran stock exchange during the years 2009 to 2015. The financial flexibility and financial behavior are respectively the independent and dependent variables which were measured by the investment activity, dividend payout ratio, amount of cash holding and company value. The data analysis was done by the use of the multi-variable regression models based on the panel data techniques and the use of Eviews econometrics software. The results concluded from the study of effect of the financial flexibility on the financial behavior corresponding to the theoretical foundations which had meaningful and positive effects. Therefore, the hypothesis that the financial flexibility has positive and meaningful effects on the investment activity of the companies accepted in the stock exchange was confirmed. The other results of paper were that the financial flexibility had negative and meaningful effects on the dividend payout ratio. So, the hypothesis that the financial flexibility has negative and meaningful effects on the dividend payout ratio of the companies accepted in the stock exchange was not confirmed. The hypothesis that the financial flexibility has positive and meaningful effects on the amount of cash holding of the companies accepted in the stock exchange was not confirmed, because the effect of the flexibility on the amount of cash holding was not meaningful. Also, the hypothesis that the financial flexibility has positive and meaningful effects on the value of companies accepted in the stock exchange was confirmed.
Highlights
The financial flexibility is the affordance of companies for providing the financial recourses to have a proper reaction in the unexpected cases and events to maximize the company value [1]
The financial flexibility and financial behavior are respectively the independent and dependent variables which were measured by the investment activity, dividend payout ratio, amount of cash holding and company value
The following hypothesis can be mentioned: Hypothesis 4: the financial flexibility has positive and meaningful effect on the value of companies accepted in the stock exchange
Summary
The financial flexibility is the affordance of companies for providing the financial recourses to have a proper reaction in the unexpected cases and events to maximize the company value [1]. The companies with financial flexibility can stand against the financial pressures and when the profitable opportunity is achieved, they would provide the cash needed for the investment with minimum cost [3]. Gamba & Triantis (2008), in their study for determining a model for the measurement of the financial flexibility, defined the financial flexibility as the capacity of one company to achieve and restructure its financing with the financing with lower cost. They express that the companies with financial flexibility can avoid the financial distress in the situation of negative shocks and they invest with low cost, when the profitable opportunities are increased [3]. The main purpose of this paper is the study of effect of the financial flexibility on the financial behavior in the companies accepted in Tehran stock exchange [6]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
