Title: The effect of dividends policy on the stock prices - the Jordanian listed commercial banks case

Authors: Asem Tahtamouni

Addresses: American University of Madaba, P.O. Box 2882, Amman 11821, Jordan

Abstract: This paper aims to investigate the effect of dividends policy on the fair value of stock prices of the Jordanian commercial banks listed in the Amman Stock Exchange (ASE). The paper used 13 listed commercial banks during the period (2007-2017). It used two methods of data collection: the annual reports of the banks and the Jordanian shareholding banks guide. In order to clarify the sample, the paper utilised the frequency distributions and descriptive statistics. The paper found that stock price and dividends are correlated positively and significantly and hence there is an impact of dividends policy on fair value of stock prices in the Jordanian listed commercial banks. The paper concluded that the Jordanian listed commercial banks should work to raise the wealth of shareholders by increasing the dividends payment overtime to improve the performance of the stock market.

Keywords: dividends policy; stock price; fair value; Amman Stock Exchange; ASE; commercial banks; Jordan.

DOI: 10.1504/GBER.2020.110700

Global Business and Economics Review, 2020 Vol.23 No.4, pp.432 - 450

Received: 31 May 2019
Accepted: 06 Jan 2020

Published online: 01 Sep 2020 *

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