Free Cash Flow and Market Value of Firm: The Mediation Effect of weighted average cost of Capital

Enterprenuership Journal For Finance and Bussiness Pub Date : 2023-08-25 DOI:10.56967/ejfb2023308

عبدالكريم Mohammed, جبار السراجي, ارشد Altameemi

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Abstract

Abstract This study tests the effect of capital costs on the relationship between free cash flow (FCF) and market value. The study selected twenty-six corporations that were listed on the Jordan securities market from 2010 to 2019. The FCF is an independent variable, cost of capital is a mediation variable (proxy of WACC), and market value added (proxy of firm’s value) is a dependent variable. Baron & Kenny's methodology and the Sobel-test were used to analyze the data of the four hypotheses, including the mediation effect of capital costs on FFC & MVA. Based on the Sobel test results, there is a partial mediation effect of the cost of capital between the free cash flow and the market value added of the firm, and the free cash flow is positively related to the market value added. Therefore, FCF has the capability to send positive signals to financial market participants about the firm's performance. Keywords: - Free Cash Flow (FCF), Weighted Average Cost of Capital (WACC), Market Value Added (MVA), Mmarket Value of Equity (MVE), Capital Asset Pricing Model (CAPM), Beta Coefficient (β).

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企业自由现金流与市场价值:加权平均资本成本的中介效应

摘要# x0D;本研究检验资本成本对自由现金流(FCF)与市场价值关系的影响。该研究选择了2010年至2019年在约旦证券市场上市的26家公司。资金融资额是自变量，资金成本是中介变量(WACC的代理)，市场增加值(企业价值的代理)是因变量。男爵,采用Kenny的方法和sobel检验分析了四个假设的数据，包括资本成本对FFC的中介效应;MVA。Sobel检验结果表明，资本成本在企业自由现金流与市场增加值之间存在部分中介作用，自由现金流与市场增加值正相关。因此，FCF有能力向金融市场参与者发出有关企业绩效的积极信号。关键词:自由现金流(FCF)、加权平均资本成本(WACC)、市场增加值(MVA)、股权市场价值(MVE)、资本资产定价模型(CAPM)、贝塔系数(β)& # x0D;

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Enterprenuership Journal For Finance and Bussiness

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