The Effect of Stock Market Liquidity and Family Ownership on the leverage

One of the important issues in financial literature is determining the factors affecting the company's capital structure. Although several factors play a role in determining the company's capital structure, the purpose of this study is to examine the effect of stock liquidity and family ownership on financial leverage. This research is descriptive-correlational. The statistical population of this study includes all companies accepted in Tehran Stock Exchange during 2010-2016. The sample size utilizes a systematic removal method of over 105 companies. The research methodology is based on the multivariate regression method of combined data. Liquidity was evaluated using two criteria of the distance from the bid price. The financial leverage was also measured using the market value method and the book value. The results of the study showed that liquidity of the stock market has a positive effect on the financial leverage ratio of the company. But this effect is not impressive. In other words, the non-liquidity criterion has been affected by a 95% confidence level on the book value-based leverage, but the criterion of the proposed selling distance is 90% confidence in the financial leverage. Other findings from the research are the lack of relationship between family ownership and the company's leverage ratio.