Capital Structure And Corporate Performance In The Nigerian Listed Insurance Companies

ABSTRACT

The study investigated capital structure and corporate performance in Nigerian  listed insurance companies, it aimed to examine the leverage on the profitability of quoted insurance companies in

Nigeria,  to ascertain the effect of leverage ion the liquidity  of quoted insurance companies in Nigeria.  Descriptive statistics  was used to summarize the data collected during the study in a clear and understandable way, ordinary least  square regression (OLS) method was adopted to investigate the relationship between the dependent and independent variables. From the study Debt to equity ratio (LEV} reflects a mean of 1.8507  and a standard deviation of 0.99392, it also has a minimum value of0.50 and a maximum value of 5.12.the profitability (PROF) has a mean of0.08568  and it reflects a minimum value of 0.07 and maximum value of 0.51.    The study also revealed that liquidity (LIQ) reflects a rriean of 0.4880 with a deviation of 0.17596.    With both maximum and minimum values of 0.73  and 0.00  respectively.  The R value shows that there was a positive relationship between LEV and PROF.   However, the study showed that there was a significant effect of leverage ratio on the profitability of listed firms in Nigeria. Also,  there was no significant effect of leverage ratio on the liquidity of listed firms in Nigeria.  It is recommended based on the findings from the study that insurance firms should watch out for the cost of each source of capital. They should use and effective and efficient capital combination so as to enhance higher profitability for the forms.

TABLE  OF CONTENTS

CHAPTER  ONE INTRODUCTION

I.I    Background to the Study

1.2   Statement of the Problem                                                                                                2

1.3    Objective of the Study                                                                                                    3

1.4   Research Questions                                                                                                          3

1.5    Research Hypotheses                                                                                                      3

1.6    Scope of the Study                                                                                                          4

1.7    Significance  of the Study                                                                                                4

CHAPTER  TWO LITERATURE REVIEW

~                           2.1    Introduction                                                                                                                     s

2.2 The concept of capital  structure

2.1.2      Capital structure and liquidity of firms ﾿ s

7

2.2.3  Capital structure and profitability of firms ﾿ 7

2.3    Theoretical  framework of capital structure ﾿ 8

2.3.1      The Modigliani and miller (mm) irrelevancy theory                                                  8

2.3.2 The perking order theory ﾿ 9

2.3.3  The trade-off theory ﾿ 10

2.3.4   The Agency Theory ﾿ 10

2.4 Review of empirical  studies ﾿ 11

CHAPTER  THREE ﾿

RESEARCH  METHODOLOGY ﾿

3.1     Research Design ﾿ 22

3.3   Population and Sample Size ﾿ 22

3.4   sample size and sampling techniques ﾿ 22

3 .4 Source of Data ﾿ 23

3.5    Data analysis technique ﾿ 23

3.6  Definition of variables ﾿ 23

3.6.1     Independent Variables ﾿ 23

3.6.2    Dependent variables ﾿ 23

3. 7   Model specification ﾿ 24

3.8 limitation of the methodology ﾿ 24

CHAPTER   FOUR

PRESENTATION   OF DATA,  ANALYSIS  AND INTERPRETATION ﾿

4.1     Presentation  of Data' ﾿ 31

4.2    Data Analysis ﾿ 31

4.2.1        Data validity ﾿ 31

4.2.2      Descriptive  statistics ﾿ 32

4.2.3      Regression   of the Estimated  Model  Summary ﾿ 33

4.3.  l  Regression   results ﾿ 35

4.3.2   Test of hypotheses ﾿ 37

4.3.2.1    Test of research  hypothesis  one ﾿ 37

4.3.2.2   Test of research  hypothesis  two ﾿ 37

4.4 Discussion   of findings ﾿ 3 8

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION  AND RECOMMENDATIONS

5.1     SummaryofFindings                                                                                                         39

5.2  Conclusion                                                                                                                                   39

5.3    Recommendations                                                                                                                       39

5 .4 Limitation   of the study                                                                                                               40

5.5 Suggestions  for further  Research                                                                                               41

References

Appendix