ABSTRACT

The study examined the effect of capital structure on corporate performance with reference to First Bank interviews were used to information from first bank Nig. Aba, analysis and observations were made which gave rise to the validity of the conclusion at the end of the analysis, the major finding were: That there is relationship between capital structure arid cost of capital. That capital structure have significant effect on corporate performance (in terms of profitability') that there is a high cost of capital which hinders the companies borrowing ability. The recommendations for the study among others were: that companies should increase their efficiency in use of debt capital. That since cost of borrowing is so high, if a firm should be able to service fixed charges associated with senior securities and leasing, it can borrow. That for improved performance mostly on profitability the optimum combination of fund from varying sources which is superior to any alternative combination is necessary. The researcher than concludes that; The inability of many companies to adopt optimal capital structure has been increasing their cost of capital. Due to increase in the cost of capital for many firms, they were unable to borrow in order to meet up their capital investment hence the decrease in their performance mostly on profitability.