M.A. Thesis:

The relationship between free cash flows and Overinvestment of Free Cash Flow With a moderating role of manager’s Overconfidence and CEO’s Tenure

Overconfidence is one of the most important concepts in modern finance that has a special place in both financial theories and psychology. Overconfidence causes people to overestimate their knowledge and skills, underestimate risks, and take control of issues and events, which may not be the case. The purpose of this study is to investigate the relationship between free cash flow and overinvestment of free cash flow with the moderated Manager’s overconfidence and CEO’s tenure. For this purpose, information related to 601 companies active in the stock exchange during a fiveyear period between 5062 and 5062 was collected and analyzed using panel data method and Ives software. After reviewing and testing the research hypotheses at 229 confidence level, the results showed that there is a Positive and significant relationship between free cash flow and over-investment of cash flow. Also, the manager's overconfidence and the CEO's tenure moderate the relationship between free cash flow and Over-investment of free cash flow.

Keywords: Free cash flows, Over-investment of free cash flow, Manager’s overconfidence, CEO’s tenure