The Impact of Dividend Distribution on Cash Flow Predictability in Tehran Stock Exchange

Abstract

This study investigates the impact of dividend distribution on the predictability of cash flow data. Predictability is defined as the ability of an accounting variable to predict future cash flows. Dividend Distribution among shareholders is an indicator for predicting cash flow. The period of this study is from 2007-2012 and the sample is 121 companies listed on the Tehran stock exchange. In this research, the dependent variable is cash flow predictability and the independent variable is dividend distribution as well as control variable is firm size. Multivariate regression analysis was used to test the research data. According to the research findings, cash flow forecasting has normal distribution and the changes in future cash flows are because of changes in dividend distribution (cash distributions to shareholders). The research findings show firm size has the same effect on free cash flow and operating cash flow.

DOI: 10.5901/mjss.2015.v6n6s2p591