due to its direct relationship to the shareholders and its reflection on the share price in the market.

As it pertains to the decision to divide the company’s net profits into the profits distributed among the shareholders and the retained earnings.

According to the shares pricing model, the share price in the stock market is influenced by the policy of profits adopted by the company.

On the other hand, the share price also increases in proportion to the company’s growth rate, which is affected in turn and indirectly by the number of profits that are retained and reinvested in the company.

In the case of retaining more profits (as a result of distributing a smaller amount of the dividends), this leads to an increase in the growth rate and thus an increase in the share price,while reducing the retained earnings results in an increase in the number of profits distributed to a decrease in the growth rate, which in turn leads to a reduction in the share price