Influence of Long-term Debt on Agent's Over-investment and Firm Value Problem

The goal of this research is evaluating the effect of long-term debt on agent’s over-investment and firm value problem. In this research، information was collected from company listed in Tehran Stock Exchange (TSE) during 1383 -1388. Cash (liquidity) ratio and capital expenditure ratio were considered as indicators of measuring over-investment. The research method was correlation and the analysis method was multivariate regression with the pattern of pooled data. The research findings showed that the long-term debts lead to reducing industry-adjusted cash ratio. Also، it was confirmed that there is positive and direct relation between firm value and cash ratio. On the other hand، results showed that long-term debt of the firms cause to reduce over-investment in capital expenditure ratio and this reduction leads to increase firm’s value.