Effect of financial leverage and dividend payment on corporate value: case in Vietnamese real estate sector
Abstract
The study examines the effect of financial leverage and dividend payments on firm value using a sample of 29 listed real estate firms from the Ho Chi Minh Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX). By employing the Ordinary Least Square ( OLS), Two-stage Least Square (2SLS), and Generalized Method of Moments (GMM) estimation methods, we obtain robust evidence of the positive effect of leverage and dividend distribution on real estate sector corporate value. The findings of a favorable effect of financial leverage on firm value are explained well by the trade-off and agency theorems. Additionally, the beneficial impact of dividend payments on corporate value can be explained by the bird in hand, agency, and signaling theorems. The study is expected to provide more evidence to the research community on how Vietnamese real estate financial managers execute two major financial policies from the perspective of the well-known financial theorem.