Free Cash Flow, Institutional Ownership and LongTerm Performance

Performance appraisal is a process which help shareholders make informed and optimal investment decisions. In recent decades, a long stream of research has devoted particular attention to the importance and impact of financial decisions on firm performance and firm value. The present study thus is primarily concerned with investigating the association between free cash flow and institutional ownership and longterm performance of the firms listed on the Tehran Stock Exchange over the period of 20122016. Moreover, firm size, financial leverage and sale grows serve as the control variables of the research. A number of 89 firms listed on the Tehran Stock Exchange were selected, and then the research hypotheses were tested using multivariate regression model based on panel data. The results reveal that firm longterm performance is not significantly correlated with free cash flow, yet it has a significant relationship with institutional ownership.