Quote Originally Posted by hrvojej
Morale affects how long the unit stays in the fight, no direct effect on attack and defence. This thread might also have some info about what you are asking.
Are you certain about this? I thought low morale reduced attack values in MTW. I KNOW the "frightened" attribute reduced attack (in addition to reducing morale).

AFAIK, the devs have not given a clear description of the combat resolution mechanism.