Abstract
In the 20(th) century, the golden ratio has been discovered by modern science, including economics, business, and finance. In the field of finance, the ratio is mostly applied for technical analysis, and much less attention is given to its use in solving corporate finance problems, such as capital structure decisions. In this study, 455 US and European manufacturing and service firm's data are examined from the period 2010-2019. The purpose of the investigation was to determine if there are any positive impacts of a golden ratio-based capital structure on financial performance and market acceptance. We find significant positive relationships between the deviation from the golden ratio-based capital structure and the deviations of firms' revenue, income, stock price and market value data from their historical maximum. Thus, indicating the golden ratio-based capital structure may be an efficient tool for firms to boost their performance and market acceptance. Based on our results, this relationship is more obvious in the United States than in Europe, and stronger for service firms than for manufacturing companies.