International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

An Empirical Study on Effect of Profitability Ratios & Market Value Ratios on Market Capitalization of Commercial Banks in Jordan
Dr. Mohammad Abdelkarim Yousef Almumani

This study investigates the effect of profitability ratios and market value ratios on the market capitalization for Jordanian listed commercial banks. Data for Jordanian commercial banks for the years from 2010 up to 2016 were used. Market capitalization was measured by the number of its subscribed shares multiplied by its market Closing Price per share as the dependent variable. The independent variables of the study were Return on Equity and Return on Assets as measures profitability. and Earning Per Share, Price Earnings Ratio, and Dividend Payout Ratio as measures of market value. The results of the study revealed that return on equity and dividend payout ratio are the most influencing factors in determining market capitalization of the selected commercial banks during the study period.

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