Capital structure puzzle is a challenging issue in Corporate Finance.
Different researchers attempt to identify ways to determine optimized
capital structure which minimizes firm’s cost of capital and
maximizes its value, by proposing variety of theories. In line with
forming new theories and introducing determinant variables, the
absence of comprehensive research which simultaneously tests
existing theories is obvious. Considering the issue literature perfectly,
we attempt to identify introduced determinant variables and propose
appropriate model using Forward Stepwise Data Reduction Algorithm
and Econometrics tools. To achieve this objective, we select 78
Companies listed in Tehran Stock Exchange and consider the effects
of Trade-off theory, Pecking Order theory and Market Timing theory
from 1380 to 1384. Finally we propose a regression model which is
the best estimation of existing data for the whole instance and each
cluster of industry.