The impact of free cash flow and growth opportunity on disclosure quality and stock return synchronicity in the firms listed on Tehran Stock Exchange

The main objective of this paper is to investigate whether Jensen's free cash flow problem increases stock return synchronicity or not. Based on the previous studies, this is expected that low-growth firms with high free cash flow increase stock return synchronicity by decreasing disclosure quality.
This research examined the hypotheses of the research by using two Tobit regression models. For this Purpose, a sample containing 112 companies listed on Tehran Stock Exchange for the time period of the beginning of 1389 to the end of 1393 were selected.
The research findings show that free cash flow and growth opportunities, respectively, negatively and positively affects disclosure quality and respectively, positively and negatively affects stock return synchronicity.
Accordingly, in low-growth firms with high free cash flow, disclosure quality is lower and stock return synchronicity is higher and the findings of the previous studies are supported. In other words, this can be resulted that Jensen's free cash flow problem increases stock return synchronicity.