THE IMPACT OF FREE CASH FLOW, EQUITY CONCENTRATION AND AGENCY COSTS ON FIRM’S PROFITABILITY
Abstract
This paper examines how free cash flow and equity concentration are
associated with agency costs, and how they influence the profitability of insurance
firms listed in the Saudi Stock Market. The results indicate that equity concentration
has no significant impact on agency costs, free cash flow has no significant impact on
agency costs and agency costs has no significant impact on firm’s profitability. The
finding of this study do not show any evidence to support the agency theory among
insurance firms listed in the Saudi Stock Market.