Abimbola, Abosede JOSHUA and Akintoye, R. O (2019) CAPITAL STRUCTURE DECISIONSON A FIRM’S VALUE: A STUDY OF MANUFACTURING COMPANIES IN NIGERIA. In: SCHOOL OF MANAGEMENT STUDIES 10TH NATIONAL CONFERENCE, 2019, THE FEDERAL POLYTECHNIC, ILARO, OGUN STATE. (Submitted)
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Abstract
The capital structure decision of an entity enables it to have a capital mix which enhances maximization of the organization’s value. The study aims at exploring the capital structure decision of manufacturing companies in Nigeria so as to establish its effect on maximum organizational value enhancement. The variables used as proxies for capital structure include equity, debt to equity ratio and debt on total asset ratio, while the variable used for firms’ value is return on assets (ROA). The sample size used in this study includes 10 manufacturing listed firms in Nigeria and the sampling technique adopted is the simple random sampling technique. The data required is obtained from the financial statements of the listed manufacturing companies for the period of 2013-2017. The method of analysis was a multiple regression analysis model to estimate the relationship between capital structure and firm’s value. The result revealed that companies with debt and equity mix has higher value than companies with only equity as it significantly affect return on assets which support the traditional view of capital structure. Therefore, the study suggests that companies should ensure that there is a judicious mix of debt and equity in their capital structure which will reduce the weighted cost of capital (WACC) and on the long run enhance the organisations’ value.
| Item Type: | Conference or Workshop Item (Paper) |
|---|---|
| Subjects: | H Social Sciences > HG Finance |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Humanities |
| Depositing User: | Unnamed user with email [email protected] |
| Date Deposited: | 24 Jun 2022 16:40 |
| Last Modified: | 24 Jun 2022 16:40 |
| URI: | http://eprints.federalpolyilaro.edu.ng/id/eprint/2001 |
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