According to Trade off theory, the firms have an Optimal leverage and any deviation can weaken corporate performance and subsequently decrease the firms value. In this research, the relation between deviations from Optimal leverage and accumulated abnormal returns of stocks was considered in order to study the effect of deviation from Optimal leverage on market participants. To this end, this paper uses data from 96 firms listed in Tehran Stock Exchange during 2009-2017 and also applies the approach to control the industry and year effects. Results show that the market impounds the information about deviation from Optimal leverage in stock prices and the above or below Optimal leverage, equity overvalued or undervalued are main factors modify price impact. It means that market has positive reaction to increase the distance from Optimal leverage in firms that their leverage are lower than Optimal and their stock overvalued. Deviation from Optimal leverage in these firms is leading to an increase in abnormal returns of stocks. Because the Optimal leverage measurement don't affect on the results, in this paper four measures was used that among them, the results of moving average leverage measures had more compatibility with research literature.

This study examines whether the firms’,leverage adjustment speed is influenced by real and accrual-based earnings manipulation over the period 2006-2019. We find evidence suggesting that the leverage adjustment speed in firms with a higher level of real and accrual-based earnings manipulation is slower than that of other firms. Specifically, we show that under-levered (over-levered) firms with a higher level of earnings manipulation tend to adjust their actual leverage toward an Optimal level, faster (slower) than that of other firms. These results are robust to different metrics for real and accrual-based earnings management, an alternative set of leverage determinants, alternative sample periods, and various estimation methods.

Objective: Optimal leverage is one of the anchors of capital structure studies. These studies have used a wide range of debt ratios as the Optimal ratio; however, the choice of the proxy can influence the results of the studies. Method: This paper aims to scrutinize the best Optimal leverage between the firm’ s mean leverage, moving average leverage, industry mean leverage and predicted leverage ratio based on regressions. Choice of the best proxy is based on the speed of adjustment, financing decisions and firm’ s market value. Results: The results show that the change in market value is similar for all proxies when leverage deviates away from its optimum. It means as the firm's leverage ratio deviates away from its optimum, its market value declines in the firms whose leverage ratio is above the proxy. But the study of the speed of adjustment and financial decision shows that these alternative proxies yield results that are significantly different from each other. In other words, the conclusions drawn from the findings are sensitive to the model's proxy. Of the proxies in this study, the moving average debt measure exhibits characteristics that are most consistent with the theoretical Optimal leverage ratio.

1-IntroductionThe speed of adjustment of financial leverage indicates the movement of companies towards the Optimal capital structure. The importance of Optimal leverage is such that the growth and survival of companies depends on this factor. In general, the capital structure reflects Optimal debt and equity and is the most important issue in corporate finance. The capital structure is the core of the company's finances, because it affects its profitability, risks and value. By accepting the two levels of real and Optimal leverage, it should be accepted that there are factors that influence the company to reach that Optimal level of financial leverage. One of the factors affecting the speed of adjustment of financial leverage towards the target lever is stock pricing in the capital market; incorrect pricing can affect the speed of adjustment of leverage towards the Optimal lever. On the other hand, stock pricing itself will be influenced by factors in the capital market, including the opinions of investors. The behavior and opinions of investors are the most obvious factors that determine the price of assets and stocks, especially in emerging markets. 2-HypothesesThe speed of adjustment of financial leverage depends on various factors. The theory of equilibrium and market positioning is expressed in such a way that adjusting the leverage towards the Optimal leverage requires reducing the debt or increasing the stock price, and when the stock price is priced higher or lower than its intrinsic value, adjusting the leverage towards Optimum leverage is easier, this is important in companies with high leverage and low financial leverage. Therefore, according to this theory, it is clear that one of the factors affecting the speed of adjustment of financial leverage towards the target lever is stock pricing in the capital market, and incorrect pricing can affect the speed of adjustment of leverage towards the Optimal lever. On the other hand, stock pricing itself will be influenced by factors in the capital market, including the opinions of investors. Investors' behavior and opinions are the most obvious determinants of asset and stock prices, especially in emerging markets. According to the stated contents, the hypothesis of the research is presented as follows:hypothesis: There is a negative and significant relationship between the divergence of investors' opinions and the speed of adjustment of financial leverage. 3-MethodThe current research is applied and from the methodological point of view, correlation is causal type (post-event). The statistical population under investigation in this research is all the companies admitted to the Tehran Stock Exchange and the period under investigation is from 2012 to 2021. In this research, the systematic elimination method was used to reach the sample, and 124 companies were selected as the research sample. Data analysis has been done by using the combined data method and with the data panel approach and by using Eviews 12 software to test the hypotheses. 4-ResultsAccording to the findings, it was observed that there is a positive relationship between the divergence of investors' opinions and the speed of adjustment of financial leverage, and with the intensification of the difference of opinion between investors, the speed of adjustment of the company's financial leverage increases. The current research provided evidence that shows that the difference of beliefs and opinions in the capital market and confusion in this field can directly affect the most important pillar of companies (financial leverage) and the speed of Optimal leverage and Optimal debt level achievement. It is surprising that so little attention has been paid to it in the country. 5-Discussion and ConclusionThe capital structure is the main pillar of the formation and survival of the activities of a commercial company. The capital structure consists of the amount of debt and capital of the company in order to finance the operational cycle of the company. Considering this and believing that every company ideally searches for an Optimal financial leverage and seeks to find that ideal,  the faster the company achieves this goal, the better the financial performance it can achieve. Taking the risks and problems faced by companies into consideration, this is possible with effort and perseverance and special strategic planning in turbulent conditions and current internal and external crises. One of the important measures to achieve the Optimal financial leverage is planning in order to know the factors affecting this fundamental factor in the progress of companies. In fact, according to the theories presented in the financial field, one of the important factors affecting the speed of adjustment of the financial leverage towards the Optimal leverage can be seen on the other side of the company's capital structure, which is actually the stock price in the capital market and how it is priced; in what form and at what level and at what distance from the intrinsic value of the stock price in the market by informed and uninformed analysts and investors, intentionally or unintentionally and with what intention is being formed. Therefore, the opinions and opinions of investors in the capital market, according to the results obtained from the hypothesis test of the research, directly affect the speed of companies achieving Optimal financial leverage. In fact, when the opinions and opinions of people in the market regarding the shares of a company are far apart from each other, according to Peng et al. (2016), the shares will be traded with a higher value than the intrinsic value, and according to the equilibrium theory, in such a situation, if the amount of leverage is higher, the leverage will be adjusted towards the target leverage; Also, it will be done more quickly, so it can be said that the disagreement of investors in the market can help companies to compensate the gap between real and Optimal leverage faster. The obtained results are, in a way, complementary to the research results of Peng et al. (2016), Ramsheh and Qarakhani (2016), Silva and Cerquera (2021), and in line with the research of Sun et al. (2022), who acknowledged that the opinions of analysts overlap. The market can reduce the speed of lever adjustment.  

The purpose of this paper is a study on the effect of cash flows on the gap between the actual leverage and Optimal financial leverage ratio companies listed in Tehran Stock Exchange. In this regard, advanced econometric techniques such as partial adjustment model on panel data and Generalized method of moments were used to achieve a reasonable estimate of the impacts. In this paper, having access to financial information related to 101 firms in Tehran Stock Exchange were analyzed during the years 2008 –2015. The results show that cash flows have an impact on the gap between the actual leverage ratio and Optimal financial leverage. This deviation is higher at companies which have higher leverage ratio since they are facing more financial crisis. Furthermore, we find that firms with various growth and investment opportunities, or different size and profitability are moving toward their target levers with different speeds. In general, these findings are consistent with dynamic trade-off theory capability to describe corporation finance behaviare.

Excessive leverage by banks is widely believed to have contributed to the global financial crisis. To address this, the international community has proposed the adoption of a non-risk-based capital measure, the leverage ratio, as an additional prudential tool to complement minimum capital adequacy requirements. Its adoption can reduce the risk of excessive leverage building up in individual entities and in the financial system as a whole.The leverage ratio has inherent limitations, however, and should therefore be considered as just one of a set of macro and micro prudential policy tools.

In this paper, a novel risk-based, two-objective (technical and economical) Optimal reactive power dispatch method in a wind-integrated power system is proposed which is more consistent with operational criteria.  The technical objective includes the minimization of the new voltage instability risk index. The economical objective includes cost minimization of reactive power generation and active power loss. The proposed voltage instability risk employs a hybrid possibilistic (Delphi-Fuzzy)-probabilistic approach that takes into consideration the operator’s experience, the wind speed and demand forecast uncertainties when quantifying the risk index. The decision variables are the reactive power resources of the system. To solve the problem, the modified multi-objective particle swarm optimization algorithm with sine and cosine acceleration coefficients is utilized. The method is implemented on the modified IEEE 30-bus system. The proposed method is compared with those in the previously published literature, and the results confirm that the proposed risk index is better at estimating the voltage instability risk of the system, especially in cases with severe impact and low probability. In addition, according to the simulation results compared to typical security-based planning, the proposed risk-based planning may increase the security and economy of the system due to better utilization of system resources.

This study investigates whether deviation from target leverage (leverage adjustment speed) in firms with small positive earnings (i. e., SPOS) is higher (slower) than that of other firms. We find evidence suggesting that managers of SPOS manipulate sales, production processes, and discretionary expenses to avoid reporting losses. Our results show that deviation from target leverage in SPOS is higher than that of other firms. In particular, we find that the negative (positive) deviation from target leverage in SPOS is lower (higher) than that of other firms. Furthermore, the results indicate that compared with the other firms, SPOS have slower leverage adjustment speed. After conducting robustness tests, our main conclusions remain valid.

Objective: Business units are looking for new ways to improve their financial performance and reduce their risk level while financing. Considering previous studies focusing on the role of working capital efficiency on companies finance, we aim to examine the relationship between working capital efficiency and deviation from the Optimal level of capital structure. Method: In this research, two main hypotheses are proposed; firstly, to examine the previously mentioned relationship, and secondly, to measure the difference between the efficiency of working capital and the capital structure in terms of over-leveraged and under-leveraged companies. The data sample is restricted to 179 Firms listed in Tehran Stock Exchange during 2006-2017. Results: The results demonstrate that with increasing working capital efficiency, the amount of capital structure deviation from the Optimal level can be reduced. In addition, the relationship between the efficiency of working capital and the deviation from the Optimal level of capital structure in over-leveraged firms is significantly higher than under-leveraged firms.