CORPORATE ATTRIBUTES AND SHARE VALUE OF LISTED PHARMACEUTICAL FIRMS IN NIGERIA

Abstract

INTRODUCTION:All investors, institutional or individual hold one common objective when investing in the equity market; they all hope to maximize expected returns. This makes the firms to devise a means of increasing the value of their shares in the market in order to meet the objective of such investors. To achieve that, various factors are usually taken in to consideration by firms which include corporate attributes such as firm size, leverage, profitability, liquidity and growth among others, which are expected to send a signal to investors as regard to the worthiness of a firm. The search for the attributes that really affect the value of shares of a firm received a considerable attention in both the developed and the developing countries. Therefore, when such attributes that influence share price are identified, firms may use them as a platform for decision making in their quest to maximize their shareholder 's returns.What determines share price varies among different scholars. Some are of the view that factors such as corporate earnings, management strength, news of law suit, mergers, takeovers, market liquidity, government policies, analysts report, macroeconomic issues, investor's perception and technical influences can affect share price of companies (Sunde & Sanderson 2009). Apart from the above mentioned factors, corporate attributes such as firm size, leverage, profitability, growth among others also affect share price as shown by many studies such as Dana (2008), Abu Shanab (2008) & Abdallah (2012).On the above background, various studies have been conducted in an attempt to find out whether corporate attributes have impact on the share value of a firm but yielded mixed results which were discussed in the next page. This study therefore, viewed the search for whether corporate attributes such as firm size, leverage, profitability, liquidity and growth have impact on the share value of listed pharmaceutical firms in Nigeria as a worthwhile problem to delve into.Despite the variety of studies in this area, none of them to the best of our knowledge were conducted in Pharmaceutical firms in Nigeria covering a period of ten (10) years and measuring share value as the average price of shares as most of the studies used only the value as at last day of the year. It is on the basis of this that the study is considered inevitable.Therefore, the main objective of this study is to examine the impact of corporate attributes on the share value of listed Pharmaceutical firms in Nigeria. The specific objectives of the study are to:i. Determine the impact of firm size on the share price of listed pharmaceutical firms in Nigeriaii. Identify the effect of leverage on the share price of listed pharmaceutical firms in Nigeriaiii. Ascertain the impact of profitability on the share price of listed pharmaceutical firms in Nigeriaiv. Investigate the effect of liquidity on the share price of listed pharmaceutical firms in Nigeriav. Examine the impact of firm growth on the share price of listed pharmaceutical firms in NigeriaIn order to achieve the above objectives, the following hypotheses have been formulated in null form;1. Firm size has no significant impact on the share price of listed Pharmaceutica l firms in Nigeria.2. Leverage has no significant impact on the share price of listed pharmaceutical firms in Nigeria.3. Profitability has no significant impact on the share price of listed Pharmaceutical firms in Ngeria.4. Liquidity has no significant impact on the share price of listed Pharmaceutical firms in Nigeria5. Firm Growth has no significant impact on the share price of listed Pharmaceutical firms in Nigeria.LITERATURE REVIEW:Abdallah (2014) investigated the effect of financial structure, financial leverage and profitability on industrial company's value. He selected forty-six Saudi industrial companies listed in Saudi Stock Market as his sample. …