The Relationship of Free Float, Stock Returns, Liquidity and Corporate Value

Subject Areas : Financial engineering

Abdorreza Asadi ¹ , Hoda Imantalab ²

1 - Assistant Prof. of Finance, Department of Management, Neyshabur Branch, Islamic Azad University, Neyshabur, Iran
2 - Msc Financial Management, Department of Management, Neyshabur Branch, Islamic Azad University, Neyshabur, Iran

Received: 2018-09-23 Accepted : 2018-10-07 Published : 2018-12-22

Keywords: Stock Return, Liquidity, Free float, Q Tobin. JEL Classification: C33 , G32 , G34, G21,

Abstract :

The purpose of this study is to investigate the relationship between free float stock and return, liquidity and the value of listed companies in Tehran stock exchange. For analyses data collected from 134 listed companies over seven years of 2010 to 2016 has been used in the study. To analyze the data and testing the hypotheses, the study has employed multiple regression models with several variables using panel data structure. The results show that based on testing the first hypothesis, the relationship between free float and stock return is significantly positive. Moreover, based on the second hypothesis, whereas the effect of current ratio is insignificant but the significance of the total model is accepted and the relationship between free float and stock liquidity is significantly positive. In the third hypothesis the total regression model is also significant, so there is a positive and significant relationship between free float with companies value.