A reasonable investment decision has a close relationship with free cash flow and corporate governance, etc, what is vital to operate and develop the listed companies. Therefore, how to play the role of various factors in restricting ineffective investment behavior and encourage the listed companies to make reasonable and effective investment decisions have become serious problems.The thesis is based on some theories about free cash flow and corporate governance to analyzing the data (2004-2008) originated from power industry listed companies. First, the paper proposes some hypotheses to discuss the relationship between the investment decisions, free cash flow, ownership structure, management incentives, etc.; second, it illustrates the investment situation of power industry, and constructs the model to analyze and descript the efficiency of various factors in controlling over-investment behavior. Finally, according to the empirical results, the thesis put forwards some suggestions to manage free cash flow and optimize the ownership structure, etc. |