Survey on the Influence of Free Float Stock on Liquidity Indices in Tehran Stock Exchange

The goal of the present study is to examine Influence of Free Float Stock on Liquidity Indices. Quarterly data of free float stock of 102 firms of 18 industries are collected for a period of 2004 to 2008. And indices of liquidity are trading stock volume, trading market value, trading market frequency, number of buyers and number of trading days. The results of the tests indicate the significant effects of free float stock on all liquidity indices except on logarithm of trading market value. Also findings show that liquidity Indices in companies with at least 20% free float stock are larger than the same means in companies with less than 20% free float stock. Also results indicate that the mean of number of trading days in a company with at least 20% free float stock is larger than the same mean in a company with less than 20% free float stock. In Tehran stock exchange, there is a negative relationship between free float stock and P/E ratio, but is not statistically significant.