Corporate Governance And Relation between Free Cash Flow and Return
Conflict of interests usually occurs between management and shareholders on dividend and more severely in firms with significant free cash flow. If free cash flow is invested efficiently, stock return will be increase. This study investigates the effect of corporate governance, as an adjusting fact...
| Main Authors: | , , |
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| Format: | Article |
| Language: | fas |
| Published: |
Alzahra University
2018-02-01
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| Series: | پژوهشهای تجربی حسابداری |
| Subjects: | |
| Online Access: | http://jera.alzahra.ac.ir/article_3074_8e5d1728f92482499fbf8bb4a8c6aaf9.pdf |
| Summary: | Conflict of interests usually occurs between management and shareholders on dividend and more severely in firms with significant free cash flow. If free cash flow is invested efficiently, stock return will be increase. This study investigates the effect of corporate governance, as an adjusting factor of agency issue, on the relation between free cash flow and stock return.
The sample consists of 112 firms listed in Tehran Stock Exchange for the period from 2006 to 2013. The results show that institutional ownership and ownership concentration have respectively significant negative and significant positive effects on relation between free cash flow and stock return. Also, the results show that the board independence has no significant effect on relation between free cash flow and stock return. Generally results indicate that good corporate governance can decrease agency costs of free cash flow. |
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| ISSN: | 2251-8509 2538-1520 |