ABSTRACT
The study examine the impact of capital structure on corporate performance of manufacturing firms in Nigeria. It specifically determine the effect of capital structure on return on equity; ascertain the effect of capital structure on Earning per share; and ascertain the contribution of capital structure on price earning ration of the manufacturing firms.
The time period was between 2013-2017 drawing the required dependent and independent variables from their financial statement of selected manufacturing. The sample size comprised of five manufacturing firms. Capital structure was represented by debt-to equity and corporate performance represented was by represented Return on assets, Return on equity and Earnings per share of Nigerian quoted manufacturing firms that are listed on the Nigerian Stock Exchange (NSE). Multiple regression techniques were used as a tool of analysis.
Findings revealed that that debt to Equity has a negative correlation with Earning per share and price earning ratio, while debt to equity has a positive correlation with return on equity. The result of the pooled regression model revealed that earnings per share has a positive insignificant effect on debt to equity ratio. price earning ratio has a negative significant effect on capital structure while return on equity has a negative insignificant effect on capital structure. The result of the fixed effect model revealed that earning per share has a positive insignificant effect on debt to equity, price earnings ratio and return on equity has negative relationship on debt to equity, but price earnings ratio is insignificant and return of equity is significant on capital structure. The results of the random effect model revealed that debt-to-equity ratio has a negative relationship with all the performance parameters used in this study. Earning per share and return on equity has insignificant effect on debt to equity while debt-to equity has a significant effect on price earning ration. Hence from the null hypothesis above the null hypothesis should be accepted for hypothesis on return of equity and earning per share will null hypothesis should be rejected for alternative hypothesis in price earning ratio hypothesis.
It was concluded that there is impact of capital structure on corporate performance of manufacturing firms in Nigeria. It is therefore recommended that the financial manager should implement good capital structure, via the strategic level of the firm to curb the sky rocketing level of debt-to-equity, finance decisions.
TABLE OF CONTENTS
CHAPTER ONE
1.1 Background to the study
1.2 Statement of Problem
1.3 Objectives of the study.
1.4 Research Question.
1.5 Research Hypothesis.
1.7 Significance of the study.
1.8 Scope of the study.
1.9 Operational Definition of terms.
CHAPTER TWO: CONCEPTUAL/THEORETICAL FRAMEWORK
2.1 Conceptual Framework.
2.1.1 Capital Structure
2.1.2 Composition of Capital Structure
2.1.3 Concept of Profit
2.1.4 Determinant of Capital Structure.
2.2 Theoretical Framework
2.2.1 Irrelevant and relevant Theory
2.2.2 Static-Trade Off theory
2.2.3 Agency Cost Theory
2.2.4 Pecking Order Theory
2.3 Empirical Review of Capital Structure on Corporate Performance.
CHAPTER THREE: METHODOLOGY
3.1 Research Design
3.2 Population, Sample and Collection of Data.
3.3 Model Specification.
3.4 Technique for estimation.
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
4.0 Introduction
4.2 Descriptive Statistics of the Variables
4.2 Correlation Matrix
4.3 Regression results and Test of Hypothesis
4.7 Discussion of Findings
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
5.2 Conclusion
5.3 Recommendation
REFERENCES
