Investigating the Relationship between Corporate Risk-Taking and stockLiquidity with Firm Value

Measuring project risk and its relationship to returns is one of the key factors in investment decisions. In such a way that avoiding risk and also excessive risk-taking ultimately affects the value of the company. The main purpose of this study is to investigate the relationship between corporate risk-taking level and firm value. Also, the relationship between stock liquidity and firm value has been studied. To test the research’s hypotheses, 156 companies listed on the Tehran Stock Exchange between 2014 and 2018 have been studied. The cross-sectional data were analyzed by correlation method and using a regression model. The research results show that corporate risk-taking has a positive and significant relationship with firm value. However, different liquidity proxies show different results. As the stock turnover ratio, Amihud liquidity ratio and the percentage of free-floating stocks have no significant relationship with firm value, but the firm's liquidity rating has a positive and significant relationship with firm value. Also, the results show that stock liquidity does not modify the relationship between risk-taking and firm value. In local (Iranian) researches, the relationship between corporate risk-taking and company value has not been studied. Also, the model introduced to measure the corporate's risk-taking has not been used in internal researches yet, and instead of using financial data (standard deviation of stock returns), accounting data has been used to explain the corporate risk-taking. Kewords: Corporate Risk-taking, Stock Liquidity, Firm Value.