The Effect of Financial Leverage, Dividend Payout Ratio and Firm Features on Market Value of Share An applied study on companies listed on Amman Stock Exchange | ||
| Al Kut Journal of Economics Administrative Sciences | ||
| Article 1, Volume 0, Issue 24, September 2018, Pages 317-342 | ||
| Authors | ||
| D. Arshad Fouad Altemimi Prof. of Finance Technical College of Management; Baghdad Middle University of Technical; ; Hussien AbuSamra; Ph. D. of finance; D. Wafa | ||
| Abstract | ||
| Abstract The Research examined the effect of financial leverage and dividend payout ratio on stock market value, by adopts a new technique (completely randomized design), to combine the effect of Financial Leverage and Dividend payout Ratio on stock prices rather than separating them, while incorporating some feature of firm as a control variable, Such as, growth opportunities, earnings, size of firm , profitability, institutional ownership, firm industry and macroeconomic variables, that could affect stock market value as a way toward the solution of optimal capital structure and optimal dividend policy dilemma. The research used panel based regression analysis depending on the sample of 30 service and industrial Jordanian firms for the period of 2001-2010, and found the following; 1) Dividend payout, Growth Opportunities, Firm’s Earnings, Firm’s Size and Institutional Ownership have a positive effect on firm stock market value. 2) Firm leverage and firm profitability measured by return on equity have a negative effect on firm stock prices. 3) Firm’s industry and a combined of financial leverage and dividend payout ratio have an effect on stock prices. 4) Stock prices for services firms and industrial firms almost affected by same factors. However, stocks beta affect stock prices for service firm but not the industrial firm, and combined of financial leverage and dividend payout ratio affect stock prices for industrial firms but non-significant effect on service firms. | ||
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