Impact of Financial Leverage on Agency cost of Free Cash Flow

Investors and creditors tend to invest in firms that have high free cash flow, because is one of the toolsevaluation of debt repayment and determination financial flexibility, is index of free cash flow .But theimportant problem about free cash flow is considered, the funds are agency problems . In thisresearch, a main hypothesis and sub-hypothesis, by selecting the 74 firm from between firms listed onthe Tehran Stock Exchange for a period of 5 years 2008-2013, the Panel method have been tested. Theresults show between agency costs of free cash flow and financial leverage, debt to equity Ratio andlong-term debt ratio there was a significant negative relationship. Findings from the research side alsoshow there was a significant positive relationship between agency costs of free cash flow withprofitability, firm size, Q-Tobin ratio and firm ownership management.

کلیدواژه ها:

Free Cash Flow ، Agency Cost ، Financial Leverage ، Debt to Equity Ratio ، Long-term Debt Ratio