Page 100 - CITN 2017 Journal

provides strong evidence that the dynamic model is realistic, changes in firm-specific
characteristics or random shocks cannot be instantaneously adjusted to in order to move
towards the target firm value
The result shows that there is positive and significantly relationship between Effective Tax
Rates (ETR) and firm value (TobinQ). Although, the theoretical expectation is an inverse
relationship between firms' value and effective tax rate; the positive relationship as shown
in this result implies that tax planning activities has not be benefiting the increase in firm
value. All other variables such as leverage (LEV), Liquidity (LIQ), Net Working Capital
(NWC), Growth opportunities (MTB) and capital intensity (CIN) were found to have a
positive and significant relationship with the firm value. These variables play a major role
in determining firms' value. Also, there is a significant negative relationship between
profitability and the value of non-financial quoted companies in Nigeria. This implies that
an increasing proportion of profitability is associated with decrease in firm value
indicating that the efforts of management to increase profit benefit other stakeholders
rather than shareholders, as this may not reflect in the firm value. The recommendation
thus is that firms need to institute more healthy tax planning practices and engage the
services of professional tax consultants for higher firm value.

93