Effect of capital structure on the performance of corporate firms in Nigeria (a study of financial sector):- Nwanja, Chinyere J.
ABSTRACT
The aim of this study is to examine the effect
of capital structure on the financial performance of First City Monument Bank
Plc. However, the major objective of the study is so ascertain the effect of
debt financing on profit after tax, to ascertain the effect of equity financing
on profit after tax and to ascertain the effect of debt/equity ratio on the
profit after tax. To achieve the above objective of the study, ex-post facto
research design was adopted. The researcher adopted secondary data in getting
the required information. In testing the hypotheses simple regression was used.
The findings shows that debt financing, equity financing, debt-equity ratios
are significant factors that determine the profit after tax used as a proxy for
performance of the bank. So, it was deduced that equity financing played a
better role than debt financing, secondly the contribution of both variables
have a significant effect on financial performance of the firm under review.
The researcher therefore recommends that in improving bank performance and
shares of equity financing in the capital structure should be increased and
finally, to avoid conflict of managers with shareholders interest, managers go
for long run value maximization of the firm which satisfies both managers and
shareholders interest.
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CHINYERE, J (2024). Effect of capital structure on the performance of corporate firms in Nigeria (a study of financial sector):- Nwanja, Chinyere J. . Repository.mouau.edu.ng: Retrieved May 17, 2024, from https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-the-performance-of-corporate-firms-in-nigeria-a-study-of-financial-sector-nwanja-chinyere-j-7-2
J, CHINYERE. "Effect of capital structure on the performance of corporate firms in Nigeria (a study of financial sector):- Nwanja, Chinyere J. " Repository.mouau.edu.ng. Repository.mouau.edu.ng, 07 Mar. 2024, https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-the-performance-of-corporate-firms-in-nigeria-a-study-of-financial-sector-nwanja-chinyere-j-7-2. Accessed 17 May. 2024.
J, CHINYERE. "Effect of capital structure on the performance of corporate firms in Nigeria (a study of financial sector):- Nwanja, Chinyere J. ". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 07 Mar. 2024. Web. 17 May. 2024. < https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-the-performance-of-corporate-firms-in-nigeria-a-study-of-financial-sector-nwanja-chinyere-j-7-2 >.
J, CHINYERE. "Effect of capital structure on the performance of corporate firms in Nigeria (a study of financial sector):- Nwanja, Chinyere J. " Repository.mouau.edu.ng (2024). Accessed 17 May. 2024. https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-the-performance-of-corporate-firms-in-nigeria-a-study-of-financial-sector-nwanja-chinyere-j-7-2