The Impact of Information Asymmetry on Profit Distribution Policies: An Applied Study in The Iraq Stock Exchange

Abstract

The research aims to clarify the relationship between the impact of information discrepancies on the dividend policy, diagnose the dividend policy and address the essential policies. Research data support the argument that this work proposes derived a group of Iraqi banks. The study concluded that: - based on the statistical analysis, that the explanatory strength of the model was significant and whose descriptive capability explained about (99.3%) of the phenomenon under study. The effect of information asymmetry on the value of stocks that investors place in their investment portfolios. Keywords: - Information asymmetry, dividend policies Introduction:- The real value of the shares that investors place in the stock market varies due to the increasing asymmetry of information. The use of is a common practice from a tax perspective, where the payment of dividends is not restricted because managers can use the money to grow and increase profits and achieve capital gains. Thus, the positive relationship between information asymmetry and dividend payments needs to be systematically explored. Stock dividends can be a tool to reduce the agency problem by distributing cash flows as dividends. It is also possible to expropriate ownership from managers. Consequently, the dividend policy is one of the most important managerial and financial decisions. In many Institutions, SOEs and managers can reduce information asymmetry by distributing profits. The higher the level of information asymmetry, the more profitable payments will be. For investors, they should have necessary awareness of dividend payments in enterprises with asymmetric information.