The purpose of this study is to look into the impact of debt and dividend policies on the relationship between overinvestment and financial performance. The study’s sample includes 31 non-financial companies listed on the Palestine stock exchange (PEX) from 2013 to 2019. Data is manually gathered from financial statements. The function of investment demand is used to calculate overinvestment while firm financial performance measures include EBIT, EBT, and EAT. Panel OLS (Ordinary Least Square) regression with robust standard errors was used for estimation. The findings revealed a negative link between overinvestment and financial performance, which can be mitigated by both debt and dividend policies. The debt and dividend policies, according to this article, are effective approaches for reducing the free cash flow problem and improving corporate governance in order to control the problem of agency.

Title

Explore Business, Technology Opportunities and Challenges

Publisher

Springer, Cham

Publisher Country

United States of America

Indexing

Scopus

Impact Factor

None

Publication Type

Both (Printed and Online)

Volume

495

Year

2023

Pages

746-756