The Free Cash Flow Anomaly Revisited: Finnish Evidence
This paper examines the performance of an investment strategy based on free cash flows using financial statement data of Finnish companies during the period 1992-2002. The analysis in this paper is motivated by the so-called free cash flow anomaly previously documented e.g. in <link rid="b15">Hackel, Livnat and Rai (2000)</link>. Using annual financial statement information, we identify large-capitalization companies with positive free cash flows, low free cash flow multiples, and low financial leverage. Since a portfolio of these companies is found to consistently outperform the market index, our results suggest that the free cash flow anomaly also exists in the Finnish stock market. Copyright 2006 The Authors Journal compilation (c) 2006 Blackwell Publishing Ltd.
Year of publication: |
2006-09
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Authors: | Jokipii, Annukka ; Vähämaa, Sami |
Published in: |
Journal of Business Finance & Accounting. - Wiley Blackwell, ISSN 0306-686X. - Vol. 33.2006-09, 7-8, p. 961-978
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Publisher: |
Wiley Blackwell |
Saved in:
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