Free cash flow problem and stock return synchronicity in the Belgian market
Ahmed Elmotawakkel Mahmoud Abdellatif, Omar
Promotor(s) : Boussaid, Nabila
Date of defense : 15-Jan-2018/20-Jan-2018 • Permalink : http://hdl.handle.net/2268.2/4395
Details
Title : | Free cash flow problem and stock return synchronicity in the Belgian market |
Author : | Ahmed Elmotawakkel Mahmoud Abdellatif, Omar |
Date of defense : | 15-Jan-2018/20-Jan-2018 |
Advisor(s) : | Boussaid, Nabila |
Committee's member(s) : | Streel, Alexandre
Nondonfaz, Jean-Luc |
Language : | English |
Number of pages : | 42 |
Keywords : | [en] free cash flow problem [en] disclosure quality [en] opaqueness [en] stock return synchronicity |
Discipline(s) : | Business & economic sciences > Finance |
Target public : | Student General public |
Institution(s) : | Université de Liège, Liège, Belgique |
Degree: | Master en sciences de gestion, à finalité spécialisée en Financial Analysis and Audit |
Faculty: | Master thesis of the HEC-Ecole de gestion de l'Université de Liège |
Abstract
[en] Firm-specific return variation has earned a remarkable recognition as a measure of stock return informativeness since the Morck et al. (2000) seminal paper.
We inspect whether Jensen’s Free Cash Flow problem increases the stock return synchronicity in the Belgian market. We expect that low-growth firms with high free cash flow have higher stock return synchronicity. In addition to that, managers of firms with high undistributed free cash flow tend to manage their earnings and lower disclosure quality.
Our empirical tests support the hypothesis that free cash flow problem is an important driver in increasing stock return synchronicity and lowering disclosure quality.
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