FINANCIAL LEVERAGE AND DIVIDEND PAYOUT ON THE MARKET VALUE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract

The valuation of industrial goods firms in Nigeria's market is a crucial area of interest, as it reflects the complex interplay between firm leverage and dividend policy on investment decisions and economic growth in the region. This study aims to empirically examine the financial leverage and dividend payout on the market value of listed industrial goods firms in Nigeria. The specific objectives are to examine the effect of financial leverage ratio and dividend payout ratio on the market value of these firms. The research questions and hypotheses are formulated accordingly. The study uses a sample of 13 industrial goods firms listed on the Nigerian Exchange Group (NGX) from 2014 to 2023. The data was collected from annual published accounts of listed industrial goods firms and was analyzed using e-views software. The study tested the data with descriptive statistics, correlation analysis, Variance inflation Factor, hausman specification tests, and Random Effects regression test. The study found that both firm leverage ratio and dividend payout ratio were not significant in affecting the tobin’s Q of sample firms. The study recommended measures to improve the efficiency of both independent variables.