The mediating role of the cash dividends distribution policy in the relationship between the determinants of the cash dividends distribution policy and the market value

Abstract

This study seeks to identify the mediating role of the cash dividends distribution policy in the relationship between the determinants of the cash dividends distribution policy and the market value of the companies listed on the Palestine Stock Exchange for the services, banking and insurance sectors during the period 2010-2018. The descriptive analytical approach was adopted and the study sample consisted of 16 companies that meet the conditions of the sample inducing distribution of profits. The study used a set of determinants of the dividend policy as independent variables. These include company size, company age, earnings per share, financial leverage. The study concluded that there is a positive relationship to the size of the company, earnings per share, the age of the company on the market value. There is a negative relationship to the financial leverage on the market value. This has an impact on the market value in light of the dividends distribution policy. In light of this, the study recommended that the companies listed on the Palestine Stock Exchange, especially the insurance sector, should pay extra attention to distributing dividends to shareholders, and not to exaggerate withholding profits if appropriate investment opportunities are not available. It is also important to expand the scope of the sample to include all sectors of the stock exchange in future studies.