M.A. in Accounting, Department of Accounting, Nourabad Mamasani Branch, Islamic Azad University, Nourabad Mamasani, Iran
In this study we review the effects of free cash flow agency problems on the value relevance of earning per share and the book value per share stock price. According to the considered situations for selecting the samples, 107 firms were chosen during the period of 2004 to 2012. For testing the hypotheses, multiple regression analysis was used. Research findings indicate that earning per share has a significant and positive relationship with book value per share stock price, and free cash flow agency problems will result in the reduction of the relevance of earning per share and book value per share stock price. Also the results showed that the relative information content of earnings per share more than the book value in related to described and predicted company's value and stock price.
Free Cash Flow, Agency Problems, Ohlson Price model's, Earning and Book Value per Share, Information Content
