Financial Leverage and Market Value of Manufacturing Firms in Nigeria

Abstract

In today’s dynamic global economy, financial leverage plays a critical role in shaping firms’ strategies and determining their value, especially within Nigeria’s manufacturing sector, which is pivotal to the country's industrial and economic development. Despite the introduction of financial regulations and managerial training, many Nigerian manufacturing firms continue to struggle with optimal leverage levels, raising concerns about declining market valuations. This study examined the effect of financial leverage on the market value of manufacturing firms listed on the Nigerian Exchange Group (NGX). The main objective of this study was to investigate how various financial leverage indicators influence the market value of these firms. The study adopted an ex-post facto research design, utilizing historical financial data from 2015 to 2024. The population comprised 34 manufacturing firms listed on the NGX, from which a purposive sample of 10 firms was selected based on data availability, consistent l