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Rp - The Effect of The Effect of fect of earnings earnings earningsretention retention retentiononcommon stock returns pdf.

Abstract
The concept of earnings retention one of the important concepts, because it
contains important processes and procedures for decision-making related to it,
so it requires balance sheet study of the company’s and consider the plans
investment and determine the necessary financing needs, and then carry out the
distribution or retention of the earnings. Moreover, the distribution and retention
policy has large effects beyond the limits of the tool for the distribution of the net
surplus revenue for the costs. To reach that any difference in the rate of
distributions have a major impact on stock prices, and changing stock prices in
the financial market according to the latest information. This kind of changes in
stock prices knows the hypothesis efficient market. Therefore, this study sought
to test the effect of earnings retention on common stock returns as well as over
the speed and response of common stock prices for information earnings
retention. The sample study consisted of (8) banks. The limits study time of the
has included years (2005-2013). The spatial boundaries were: the Iraq Stock
Exchange, and adopted study two main hypotheses:

1- There is no correlation and effect statistically significant of between earnings
retention and common stock returns.
2- Iraq Stock Exchange characterized by efficient semi-strong in responding to
an event announcement earnings retention.
In order to analyze the variables of the study and test hypotheses have been
using a number of statistical methods and mathematical and financial. The study
reached a number of conclusions, including:
1- There is relationship correlation and impact of statistically significant between
the earnings retention and common stock returns and this is contrary with the
hypothesis first study.
2- inefficiency Iraq Stock Exchange in the form semi-strong in connection its
with response to an event announcement earnings retention and this is contrary
with the hypothesis second study.
Abstract
The study found numbers of recommendations including:
1- prefers to rely on the proportion retention rather than ratio distribution as a
reliable indicator of in determining the market value of shares of the companies,
especially in terms of determining the growth rate future expected and its impact
on their value.
2- Iraq Stock Exchange management should be recognize the dangerous of the
inefficiency of the market in responding to public information and
announcements earnings retention especially, because that would be exploited
by some professionals to formulate rules trading to enable them to achieve
abnormal returns on account to other participants in the market and this brevets
the performance of the markets function basically the optimal allocation of the
economy resources.