EFFECT OF FINANCIAL LEVERAGE ON SHARE PRICE OF INDUSTRIAL GOODS FIRMS IN NIGERIA

This study investigates the impact of financial leverage on the share price of industrial goods firms in Nigeria. Panel data were sourced from the annual reports and accounts of six (6) industrial goods firms listed on the Nigerian Exchange Group for six years from 2018 to 2023. The data were analyzed using the Ordinary Least Squares (OLS) linear regression method. The leverage indicators used include short-term debt (STD) and long-term debt (LTD), while the share price serves as the dependent variable. The findings reveal that the short-term debt ratio has an insignificant negative effect on the share price, whereas the long-term debt ratio has a significant positive effect. The study recommends that the management of listed industrial goods firms in Nigeria should minimize the use of short-term financing due to its high interest rates, which can erode profits, reduce investor confidence, and consequently lower share prices.

0 19 Dec, 2025

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