FINANCIAL STRUCTURE AND THE VALUE OF THE FIRM A CROSS-SECTIONAL INDUSTRY STUDY OF NIGERIAN QUOTED FIRMS

📄 Project Abstract

The controversy over the optimal capital structure question focuses on the effect of the addition of non-equity financing on the quality of the firm's earnings and on the rate at which the earnings are capitalized. Theory posits that capital structure of a firm affects its shareholders' return and risk, and consequently, the market value of shares, hence its significance in corporate financing decisions. This study therefore empirically examines the impact of financial structure decision on the value of Nigerian quoted firms. Cross-sectional time series data of 72 Nigerian quoted firms, for the 1997-2007 periods, were collated from the published annual reports and accounts of the companies, and from the Nigerian Stock Exchange Fact Books of the same period. Five hypotheses were proposed for the study, while the ordinary least square (OLS), fixed-effects (FE) and the gerneralised least square (GLS) regression were used on pooled and panel data to validate the hypotheses and to estimate ...