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ABSTRACT
This study on the impact of financial leverage on firm performance seeks to examine the use of leverage in some quoted companies in Nigeria as well as its attendant impact on the market value of these firms. The study makes use of secondary sources of data collected from the Nigerian Stock Exchange for the periods 2008 to 2012. A sample of one-hundred and five (105) quoted firms was collected for the empirical analyses. The results showed that financial leverage had a positive and insignificant impact of 1.17 on market value of the sampled quoted firms in Nigeria, thus accepting the null Hypothesis one (Ho1). In addition, the classification of quoted firms as either small or large firms, based on the size of their total assets, revealed that financial leverage had a significant negative impact of-2.08 and -3.66 respectively on market value of the firms thus rejecting the null hypothesis two (Ho2). It was therefore recommended in this study that firms should strive to have a decline in their debt profile in other to have a good increase in market value.
