The effect of surplus free cash flow, corporate governance and firm size on earnings predictability

Subject Areas : Journal of Investment Knowledge

Fatemeh Ghorbani ¹ , M. Hamed Khanmohammadi ²

1 - Department of accounting, damavand branch, islamic azad university ,damavand,iran
2 - Department of accounting, damavand branch, islamic azad university ,damavand,iran (Corresponding Author)

Received: 2017-01-05 Accepted : 2017-04-22 Published : 2018-03-21

Keywords: Surplus free cash flow, Governance structure, Firm Size, Earnings predictability,

Abstract :

The aim of this paper is investigates the impact of surplus free cash flow, corporate governance and firm size on earnings predictability firms in the Tehran Stock Exchange. Free cash flow surplus and earn as independent variables. Also corporate governance mechanisms (independent board of directors, independent chairman, institutional ownership, and managerial ownership) and firm size as moderator variables. The final sample using of 100 firms listed in the Tehran Stock Exchange between2008 to 2014 research done. Linear regression analysis is used for testing the hypotheses. Free cash flow surplus and earn as independent variables. Also corporate governance mechanisms (independent board of directors, independent chairman, institutional ownership, and managerial ownership) and firm size as moderator variables. Result of the test hypotheses indicates that the excess free cash flow and Earnings predictability have effect.and there is also corporate governance mechanisms (independent board of directors, independent chairman, institutional ownership, and managerial ownership) on the relationship between excess free cash flow and Earnings predictability have no effect.    

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