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Is the free cash flow hypothesis valid in Turkey?

Eyup Kadioglu and Ender Aykut Yilmaz

Borsa Istanbul Review, 2017, vol. 17, issue 2, 111-116

Abstract: This study tests the validity of the free cash flow hypothesis in the context of firms traded on Borsa Istanbul. The study applies a panel regression to a data set composed of 1267 observations from 227 companies during the period 2008–2014. The results reveal a significant, negative correlation between dividends per share and free cash flow. Likewise, a significant, inverse relationship is found between leverage and free cash flow. Thus, the results support the free cash flow hypothesis.

Keywords: Free cash flow hypothesis; Agency cost; Agency problem; Dividend payout (search for similar items in EconPapers)
JEL-codes: G10 G15 G34 G35 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:bor:bistre:v:17:y:2017:i:2:p:111-116

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