IMPACT OF CAPITAL STRUCTURE ON FIRM VALUE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
Abstract
The study examined the impact of capital structure on firm value of listed deposit money banks in Nigeria. The study specifically examined the impact total debt to total assets, long term debt to assets and total debt to total equity ratio on firm value measured by market share price of listed deposit money banks in Nigeria. The study adopted an ex-post facto research design using thirteen (13) deposit money banks listed on Nigeria Exchange Group. Secondary data for the study was obtained from audited annual reports and accounts of the banks. Descriptive statistics and multiple regression technique were used as tools for data analysis. The findings of the study revealed that; total debt to total assets have negative significant effect on firm value while long term debt to total assets and total debt to equity have significant positive effect on firm value of listed deposit money banks in Nigeria. The study recommends among others that management of deposit money banks should always take advantage of total debt available in their disposal to efficiently finance non-current assets, by continually varying the proportion of each debt on their capital to find out the optimal capital structure and maintain it so as to optimize their value.
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