There is also a positive relationship between financial leverage and firm value on the GSE. This relationship is
also statistically significant. Firms with more long-term debt relative to equity tend to meet the expectations of
investors hence the positive relationship between them. Probably, the present value of tax deductibility allowed
by the Income Tax Act (Act 592) adds significantly to the value of the firm hence the positive relationship observed. We also found a positive relationship between dividend and firm value and this is statistically
significance. Dividend payment is strongly valued by investors on the GSE. A 1 percent increase in dividend
leads to 6.5304 increase in firm value.