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| Capital Structure and Firms Value: A Study of Selected Listed Manufacturing Companies in Nigeria |
Ajayi, Samuel Oluwatobi, Sheriff, Oyesanya, Olajire, Isaiah Olawole, Ibraheem, Abdullahi Aderemi
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Abstract:
This study focused on Capital structure and Firm's value, using a study of selected Listed Manufacturing Companies in Nigeria. The corporation's value suggests that shareholder wealth is also substantial. The goal of any organization is to improve its value. As a result, this study looked into the link between capital structure and firm value. A historical research design and an ex post facto research design were used in this study. This research used panel data, which includes both cross-sectional and time series data. The population of the study was the entire manufacturing companies in Nigeria. Ten listed manufacturing businesses in Nigeria were chosen using a basic random selection approach to evaluate the link that exists between Capital Structure and Firm Value; the study used descriptive analysis, ordinary least square regression method, and correlation. The results reveal that the Debt Ratio and Firm Size (Independent variables) have a favourable impact on Firm Value (Dependent variable), but the Proprietary Ratio and Retention Ratio have no such impact. This positive relationship suggests that financial leverage, as measured by the Debt ratio, is a significant predictor of the firm's Total Value. This indicates that businesses take proactive efforts to increase sales and value by successfully employing debt finance. In addition, the value of companies is greatly affected by the consequent effect of company size increase. As a result, asset structures have a considerable beneficial impact on company value.
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