The effect of financial leverage and agency costs of free cash flow of companies listed on Tehran Stock Exchange

The present study sought to evaluate the effect of financial leverage and agency costs on Flow listed companies Exchange is of the same order of 421 companies during the period 5138 to 1391 and with restrictions and are in finally 90 companies were selected at random.To review and hypothesis testing, multivariate regression analysis, least squares method with panel data is used. In a regression analysis to select the best model to estimate (the aggregate model, fixed effects and random effects), Chow and test was used as the random effect model was used for estimation and hypothesis testing.The results indicate that the carrying amount of the debt to capital ratio and the ratio of long-term debt agency costs of free cash flow and there is a significant negative relationship. But the ratio of debt to market capitalization and the costs of free cash flow representing a significant relationship exists.

Keywords:

Debt ratio , book value , capital , long-term debt , agency costs , free cash flow