M.A. Thesis:

The mediating effect of dividend payout on the relationship between interna governance and free cash flow

Corporate governance supervisory mechanisms are one of the important factors influencing the free cash flow of companies. Corporate governance structure defines the distribution of rights and responsibilities among different organizational actors such as directors, managers, shareholders, and other stakeholders. The main purpose of this study is to determine the mediating effect of dividend policy on the relationship between internal corporate governance and free cash flow in Tehran Stock Exchange. The study was conducted for a period of 5 years from 92 to 96 years. In this study, financial leverage and company size were also used as control variables. Sample information of the companies surveyed after reviewing the availability of their information by collecting using Excel classification software and using software Ivyves were analyzed. The results showed that there is a direct and significant relationship between board size and managerial ownership with free cash flow. On the other hand, there is a significant negative relationship between board size and managerial ownership with dividend policy. The dividend also mediates the relationship between board size and managerial ownership with free cash flow. Desirable criteria in corporate governance are the size of the board and managerial ownership, which lead to a supervisory role, the presence of more professionals, and lower agency costs, but also to different tastes. It can provide more free cash flow for future investments and generate additional returns rather than dividends for the company

Keywords: Free Cash Flow, Board Size, Managing Ownership, Profit Sharing Policy