Shahid Beheshti University Financial Management Perspective 2645-4637 8 22 2018 07 23 Leverage Adjustment Speeds in Tehran Stock Exchange Leverage Adjustment Speeds in Tehran Stock Exchange 113 134 95406 FA Manijeh Ramsheh Assistant Professor, Faculty of management, Department of accounting, University of Qom 0000-0001-9265-8819 Mohsen Gharakhani Assistant professor at Iranian Institute of Higher Education Journal Article 2017 11 04 After confirming the target leverage, estimating the speed of adjustment is the most important step in leverage behavior modeling. Each of the three main theories of Trade off, Market Timing and Pecking Order theories analysied with their own prespective the costs of deviations from target leverage and costs of adjustments to target leverage to predict speed of adjustment. Above or below target debt, financial deficit or surplus, equity overvalued or undervalued are main factors of estimating leverage adjustment speed in each of the theories. This study examined the speed of adjustment based on predictions of three theories and their interactions in listed firms of Tehran Stock Exchange over the period 1383–1395 with DPF.The results confirm the effects of three factors but not confirm the their interaction effects perfectly. The evidence showed that most of the adjustments occurred when firms have below-target leverage with a financial deficit and while etheir equity is undervalued in the market. After confirming the target leverage, estimating the speed of adjustment is the most important step in leverage behavior modeling. Each of the three main theories of Trade off, Market Timing and Pecking Order theories analysied with their own prespective the costs of deviations from target leverage and costs of adjustments to target leverage to predict speed of adjustment. Above or below target debt, financial deficit or surplus, equity overvalued or undervalued are main factors of estimating leverage adjustment speed in each of the theories. This study examined the speed of adjustment based on predictions of three theories and their interactions in listed firms of Tehran Stock Exchange over the period 1383–1395 with DPF.The results confirm the effects of three factors but not confirm the their interaction effects perfectly. The evidence showed that most of the adjustments occurred when firms have below-target leverage with a financial deficit and while etheir equity is undervalued in the market. https://jfmp.sbu.ac.ir/article_95406_203ea99c417de21fe653491209fd26d2.pdf