2024, Vol. 7, Issue 2

author(s)
Dr. Adel Mansour Fadel and Hussein Mohammed Hussein

abstract
The research aims to explain the flexibility of the capital structure of the Iraqi banking sector and the extent to which the general index of the Iraqi stock market is affected by it, as well as measuring and analysing the relationship, if relying on the financial flexibility ratios of the capital structure: (equity multiplier ratio, rate of return on equity, trading ratio, rate of return on assets), and the research population consisted of (20) banks listed on the Iraqi Stock Exchange, and the research found that there was a positive and significant effect of the property right multiplier of (5.19), and the existence of a direct effect of the rate of return on property rights, of (3.75), and there is a direct effect of the trading ratio, amounting to (2.43), and as for the rate of return on assets, the relationship appeared inverse and insignificant, amounting to (-0.34), and this explains that the inverse relationship can be estimated that the rate of return on assets is the result of the percentage difference between Banking revenues and operating costs, and the decrease in this ratio is mainly due to the decrease in the rate of return on assets, which affected the market value of the banks in the research sample. The research recommends not relying on property rights as the primary source of financing and the necessity of diversifying sources of financing through borrowing, and reconciling liquidity and profitability. Paying attention to the level of profitability of banks by reducing operating expenses and costs and investing shareholders’ money well, which reflects positively on the market value.