This paper presents an empirical investigation to study the effect of financial flexibility on capital structure decisions on selected firms listed in Tehran Stock Exchange over the period 2006-2018. The results indicate that the cash value of the previous years had no meaningful relationship with the current year's financial leverage, which suggests that flexibility in previous years could not explain the financial leverage of the coming years and financial leverage of companies changes did not occur based on the past years performance. When the ultimate value of financial flexibility is high, the impact of different variables, for example, profits, depreciation, and depreciation costs, fixed assets, etc., on leverage is of little importance, with a slight change in leverage. Companies with a high final value of financial flexibility are willing to maintain their current debt capacities, but it is significantly possible that they target deliberate or temporary deviations from their leverage ratios.

This study evaluated the relationship between cost and performance yield investment opportunities, cash and financial flexibility bank pays. For this study, a sample of 94 companies from companies that are part of corporate clients BSI was selected using random sampling technique. In addition, to measure the performance, three measures of economic value added, return on assets and return on equity were used. The study evaluated the relationship between cash and the opportunity cost efficiency as well as financial flexibility to invest in BSI over the period 2007-2012. Statistical methods used in this study were panel data regression. Four hypotheses were proposed to achieve the goals and the results showed that the opportunity cost of holding cash investments with financial flexibility and efficiency were inversely associated with financial performance.