Investigating the Effect of Corporate Diversification on the Value of Companies in Tehran Stock Exchange

Abstract

This research examined effect of corporate diversification on the firm's value in companies listed in Tehran Stock
Exchange during the years 2006 till 2013. To answer the question posed one hypothesis. The hypothesis examined the
relationship between the company's diversification and growth opportunities. Dependent variable of the study is
company's value. Enterprise value has been calculated by natural logarithm of the market value per share of the
company's expected value. The independent variable of this research is diversification that was calculated by entropy
index. To select the sample size of the study population the systematic elimination method is used, and finally 263
companies that were consistent with the research, was selected. To test the hypothesis of Panel data is used. The results
show a significant positive impact between diversification and company's firm value.