The Effects of Customer Concentration Risk on the Cost of Equity in the Listed Companies of Tehran Stock Exchange (TSE)

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FAKHARI HOSSIEN; GhAFARI CHERATI mahmood

مرکز اطلاعات علمی Scientific Information Database (SID) - Trusted Source for Research and Academic Resources

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Journal: Iranian Journal of Trade Studies Year:2018 | Volume:22 | Issue:87 Page(s): 101-125

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Information Journal Paper

Title

The Effects of Customer Concentration Risk on the Cost of Equity in the Listed Companies of Tehran Stock Exchange (TSE)

Author(s)

FAKHARI HOSSIEN | GhAFARI CHERATI mahmood | Issue Writer Certificate

Keywords

Business riskQ1

Customer ConcentrationQ1

Cost of equityQ2

Abstract

The new business orientation, using the concept of Customer Concentration, has raised the operational risk of customers as a controversial topic in financial and accounting literature. Hence, the impact of the client's operational risk on the size of the organization's activities, including financing activities, is important. Therefore, the present study seeks to investigate the risk of Customer Concentration on the Cost of equity in the Listed Companies of Tehran Stock Exchange. For this purpose, the data for 79 companies during the period from 2009 to 2014 have been investigated through hybrid data analysis. Herfindal-Hirschman and Entropy have been used to calculate Customer Concentration. The results indicate that the impact of risk of Customer Concentration calculated using both Herfindal-Hirschman index and Entropy on the Cost of equity is positive and significant. The findings of this study indicate the undeniable importance of the major customers in the market, which in addition to revealing the need to pay attention to such customers is also practical for managers as well for how the financing costs are tailored to the degree of concentration of the company's customers. The findings of this study could improve the decision-making processes of investors.

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APA: Copy

FAKHARI, HOSSIEN, & GhAFARI CHERATI, mahmood. (2018). The Effects of Customer Concentration Risk on the Cost of Equity in the Listed Companies of Tehran Stock Exchange (TSE). IRANIAN JOURNAL OF TRADE STUDIES (IJTS), 22(87 ), 101-125. SID. https://sid.ir/paper/7194/en

Vancouver: Copy

FAKHARI HOSSIEN, GhAFARI CHERATI mahmood. The Effects of Customer Concentration Risk on the Cost of Equity in the Listed Companies of Tehran Stock Exchange (TSE). IRANIAN JOURNAL OF TRADE STUDIES (IJTS)[Internet]. 2018;22(87 ):101-125. Available from: https://sid.ir/paper/7194/en

IEEE: Copy

HOSSIEN FAKHARI, and mahmood GhAFARI CHERATI, “The Effects of Customer Concentration Risk on the Cost of Equity in the Listed Companies of Tehran Stock Exchange (TSE),” IRANIAN JOURNAL OF TRADE STUDIES (IJTS), vol. 22, no. 87 , pp. 101–125, 2018, [Online]. Available: https://sid.ir/paper/7194/en

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