Using the Dickinson Cash Flow Model instead of using the company's age in the differentiation of the life cycle stages

According to the theory of life cycle, companies have a life curve or life cycle. The cost of capital is one of the important factors in the financial decisions of a corporation that is expected to be affected by its life cycle stages. The purpose of this study is to investigate the relationship between companies' life cycle and cost of capital. For this purpose, 120 companies listed in Tehran Stock Exchange from 2006 to 2015 were investigated. Dickinson's cash flows model and capital asset pricing model were used. Findings show that the stages of growth and maturity have a negative and significant relationship with the cost of capital, while the declining stage has a significant and positive relationship with the cost of capital. However, there is no relationship between the Introduction stage and the cost of capital.