The effect of cash dividends on the market share price of industrial companies listed at Amman stock exchange

Vol. 5 (7), pp. 204-212, October, 2017

 

Full Length Research Paper

 

The effect of cash dividends on the market share price of industrial companies listed at Amman stock exchange

 

Dr. Abdullah Ahmed Aldaas

 

Accepted 25 September, 2017

The aim of this study was to investigate the effect of cash dividend distributions on market prices of industrial companies listed on the ASE. To achieve this objective, a simple random sample of industrial companies listed on the Amman Stock Exchange (ASE) was selected (25) industrial companies, and the study tool was assimilated in the financial statements and published clarifications for the sample companies, its validity and reliability were verified. Using the simple and multiple regression analysis, the study found that there is an effect on the share of the net profit of the company, the lot of the share of the profits distributed in the market share price and the effect of the distribution of profits in the price of the market share. The profit distribution variable was able to explain by a relatively high percentage the variables in the price while the net profit variable was able to explain by a small percentage the change in market price. The study recommended the need to develop a culture and mechanisms to deal with accounting performance indicators to clarify the share of the distributed dividends. The study also recommended that companies should follow the policy of stable distributed profits in order to achieve satisfaction of shareholders on the returns of their investments,and the need to apply different studies on different sectors to see the impact of dividends on companies by sector.

Keywords: profit distribution, market share price