The value relevance of book value, earnings, and dividends to stock valuation in the Jordanian capital market

Abstract EN

-This study provides an empirical examination of whether investors in the Jordanian capital market perceive accounting information to be useful in stock valuation.

In addition, this paper compares the value relevance of book value and dividends versus book value and reported earnings.

Using a sample of industrial companies over the period 1991-1999.

The researchers obtained evidence of value relevance of accounting information.

Specifically, the researchers arrived at the following conclusions.

First, book value is the most value relevant factor.

Second, dividends and earnings have almost identical explanatory power.

Third, book value and earnings are more relevant than book value and dividends.