The Mediating Role of the Capital Structure, Growth Rate, and Dividend Policy in the Relationship Between Return on Equity and Market to Book Value

Farouq Altahtamouni, Reem Matahen and Amna Qazaq

International Journal of Financial Research, 2020, vol. 11, issue 4, 155-164

Abstract: This Study aims to study the indirect effect of profits measured by the return on stockholders' equity for the Jordanian Banks on market value measured by market value to book value for the period from 2008 to 2017. We have applied the indirect impact model to know the ability of capital structure, growth rate and dividend policy as mediating variables to transfer the impact of profits to market value. By using the simple linear analysis and applying indirect effect test model by using the Sobel equation the study reached out to a positive effect of profits on market value with the presence of debt ratio, growth rate and dividend policy as a mediating variables of that relation.

Keywords: return on equity; market value; indirect effect; capital structure; growth rate; dividend policy (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:11:y:2020:i:4:p:155-164

DOI: 10.5430/ijfr.v11n4p155

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