Document Type : Original Research


Department of Accounting, Economic & Social Sciences Faculty, Bu-Ali Sina University, Hamden, Iran


The difference of cost of equity in different life cycles of firms from growth to decline can help the firms to provide finance and understand the effect of life cycle in costs of financial provision with the important consequences in strategic planning of firms. This research investigates the stages of life cycle of firms and costs of equity with data from 113 firms of The Firms Listed in Tehran Stock Exchange from 2003 to 2014. Testing the hypotheses, multiple regressions was used based on the combined data. The results showed that the cost of equity in the stages of decline increases and in growth and mature stage decreases than that in shake out stage. The findings of this research are consistent with life cycle theory of firms.


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