IDEAS home Printed from https://ideas.repec.org/a/asi/ajoerj/v10y2020i7p184-193id4318.html
   My bibliography  Save this article

The Dynamics of Capital Structure and Firm Value of Listed Industrial Goods in Nigeria

Author

Listed:
  • Maryam Isyaku Muhammad
  • Mohammed Abubakar
  • Mohammed Mahmud Kakanda
  • Muhammad Abdul Abubakar

Abstract

This paper aims to establish the effect of capital structure on the firm value of fourteen (14) quoted industrial goods companies operating in Nigeria for ten years (2008 to 2017). Data were obtained from the annual reports and accounts of the sampled firms. The indicators for capital structure comprises of long term and short term debt, while proxies for firm value include return on equity and share price. Multiple regressions were used to analyze the data. Long-term debt appeared negative and significant, with a return on equity. Like previous studies, value seems to be enhanced when industrial goods companies employ more internal funding, short term debt than long term debt. Regarding the share price, short-term debt significantly increases share price. However, long-term debt does not impact the share price of listed industrial goods companies in Nigeria. This paper recommends that management and board of directors should ensure the optimum level of financing mix in their composition of capital that enhances their business worth, particularly by minimising long-term loans.

Suggested Citation

  • Maryam Isyaku Muhammad & Mohammed Abubakar & Mohammed Mahmud Kakanda & Muhammad Abdul Abubakar, 2020. "The Dynamics of Capital Structure and Firm Value of Listed Industrial Goods in Nigeria," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 10(7), pages 184-193.
    • Handle: RePEc:asi:ajoerj:v:10:y:2020:i:7:p:184-193:id:4318
    as

    Download full text from publisher

    File URL: https://archive.aessweb.com/index.php/5004/article/view/4318/6682
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Idrees Liaqat & Muhammad Asif Khan & József Popp & Judit Oláh, 2021. "Industry, Firm, and Country Level Dynamics of Capital Structure: A Case of Pakistani Firms," JRFM, MDPI, vol. 14(9), pages 1-17, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:asi:ajoerj:v:10:y:2020:i:7:p:184-193:id:4318. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Robert Allen (email available below). General contact details of provider: https://archive.aessweb.com/index.php/5004/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.