Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

Corporate Financial Attributes and The Value of Listed Financial Service Firms: The Nigerian Evidence

Author(s): Edirin JEROH

This study investigates how corporate attributes of listed firms predicts the overall value of firms by drawing evidence from Nigeria. Thus, secondary data were carefully sourced for a 9-year period (2010 – 2018) from the financials of 32 listed firms in the financial service subsector. The entire panel data for all variables were analysed by means of descriptive, diagnostic and inferential statistics. Hypothesis was formulated and thereafter tested with the multivariate regression technique. Empirical evidence from the analysis and hypothesis testing revealed that the selected corporate attributes in this study (returns, revenue growth, earnings, leverage, company size and asset tangibility) exerted significant influence on two measures of firm value (share price and Tobin’s Q); whereas, no significant relationship was found between the selected corporate attributes of firms and the third measure of firm value (share price to book value). Specifically, while return on assets and earnings per share recorded positive correlation with all three measures of firm value, the same cannot be said for most of the explanatory variables. For instance, Revenue growth and leverage had positive correlation with Tobins’Q, but were negatively correlated with share price and share price to book value. It is however recommended that the management of entities should channel investments to the acquisition of tangible properties and equipments that will enhance the productive capabilities of their respective entities since the size of total assets possibly has proved to have the capability of enhancing share price and Tobins’Q significantly.