SUMMARY
The aim of this study was to evaluate the effectiveness of common equity cost of capital on financial decisions of companies listed in Tehran Stock Exchange. The independent and dependent variables of the research are cost of common equity capital and financial decisions (book leverage and market leverage) respectively. The sample consists of 87 companies listed on the Tehran Stock Exchange between 2009 and 2015 and the software used for statistical analysis is Stata 12. Hypotheses have been tested based on single-variable linear regression test. Based on the results from hypothesis testing, the first and second hypothesis suggests that there is a positive and significant relationship between capital costs and office financial and market leverages.