This study aimed to provide evidence of whether or not the corporate governance indicators (CGI) of the Jordanian industrial firms listed at Amman Stock Exchange (ASE) lead the firm to adopt high/low level of financial leverage and to determining which of them have significant effect. The study population consists of (96) Jordanian industrial firms' governance of the Jordanian firms listed at (ASE). (48) Firms were selected randomly to be used in the study. The study found that, corporate governance indicators do matter in Jordanian industrial firms; ownership concentration and Board size have significant negative relationship with financial leverage, when they increases financial leverage decreases, which means they lead the firm to adopt low level of external debt, while CEO duality and CEO compensation have insignificant positive relationship with financial leverage.

The purpose of this study is to test the validity of CAPM in Amman Stock Exchange (ASE) during the period (2010 – 2014), which was divided into three sub periods. We used monthly returns of 60 stocks of Jordanian companies listed in ASE. Black, Jensen and Scholes (1972) and Fama and MacBeth (1973) methods were used to test the CAPM in different study sub-periods. The analysis results showed that higher risk (beta) is not associated with higher levels of return, which violated the CAPM assumption. Results of the study leads to contradict the theory’s assumption that beta coefficient is a good toll to predict the relationship between risk and return; hence the beta coefficient of some portfolios in the three sub periods was not significant. In addition, the results of testing SML violated the CAPM assumption in the three sub periods that, the slope should be equal to the average risk premium. Finally, tests of nonlinearity of the relationship between return and betas validated the CAPM hypothesis, that the expected return-beta relationship is linear. Depending on the above results, we couldn’t find conclusive evidence in support of CAPM in ASE.