Mostafa Hashemi Tilehnouei; Javad Nikkar
Abstract
The ability to produce future cash flows is an important part of the decision-making mechanism of the various shareholders. If cash flows can be predicted appropriately, a significant part of the informational needs associated with cash flows will be provided. Some analysts and investors argue that cash ...
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The ability to produce future cash flows is an important part of the decision-making mechanism of the various shareholders. If cash flows can be predicted appropriately, a significant part of the informational needs associated with cash flows will be provided. Some analysts and investors argue that cash flows are the main criterion for valuation. In this regard, the objective of this study is to examine the impact of firm characteristics in predictable future cash flows from operating activities by employing present operating cash flow and profitability. For this reason, eight hypotheses were developed and information was analyzed for 127 firms listed in Tehran Stock Exchange for the period of between 2011 and 2020. The regression model was tested with fixed effect model using panel data. The findings of the study showed that the firm characteristics like size, level of competition and level of supervision have a positive impact on the predicting power of present operating cash flow and present profitability in anticipating future operating cash flow. By contrast, the outcomes disclose that characteristics such as company’s life will not have a significant effect on the predicting strength of present operating cash flow and present profitability to forecast future cash flow from operating activities.
Seyed Ali Seyed Khosroshahi; Parisa Vatankhah
Abstract
Firms have two choices about earning: paying it out as a dividend, or its reinvestment as a retained earning. In a market without any restrictions on trading, rational investors with liquidity needs can choose between dividend and selling stocks at no cost. In this article, the relationship between trading ...
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Firms have two choices about earning: paying it out as a dividend, or its reinvestment as a retained earning. In a market without any restrictions on trading, rational investors with liquidity needs can choose between dividend and selling stocks at no cost. In this article, the relationship between trading volume, considering free float as liquidity criterion, and the amount of dividend payout is investigated and the firm characteristics including size, profitability and growth opportunities are controlled.The research sample includes 145 firms thatlisted in Tehran Stock Exchange from 2005 to 2011. The result of the linear regression model shows that the investors in Tehran Stock Exchange (TSE) do not consider stock turnover rate as a variable which explains the amount of dividend. Also, the relationship between size and growth opportunities with dividend has not been confirmed; but profitability has a positive significant relationship with dividend. On the other hand, investors in TSE use the profitability as a criterion to determine the dividend.