Determinants of Capital Structure Decisions of Nigerian Listed Manufacturing Firms
1PAUL
AONDONA ANGAHAR, 2KASIMU ABUDU and 3UMOH ANIEBO JUSTIN
1Department of Accounting, Benue State University, Makurdi, Nigeria
2&3Department of Accounting, Veritas University, Abuja, Nigeria,
E-mail: angahar63@yahoo.co.uk, kasbud2000@yahoo.com, aniebo23@gmail.com
ABSTRACT
Capital structure decisions have been the most significant decisions to be taken by any business organization for maximization of shareholders wealth and sustained growth. The study has investigated the determinants of capital structure of Nigerian listed manufacturing companies for a period of five years from 2010 to 2015. Secondary data was collected from the annual reports of listed Nigerian manufacturing companies and it was analyzed using pooled least square. This study has investigated the impact of capital structure on profitability. It has examined the impact of firm’s turnover, total assets, profit after tax, tax and interest on the leverage on the sampled firms. The results revealed that turnover, total assets, profit after tax, tax, and interest are strong determinants of capital structure of the Nigerian manufacturing firms. Therefore, it is recommended that in carrying out their debt equity mix, the financial managers of Nigerian listed firms should ensure proper monitoring of the following variables: turnover, total assets, and profit before tax, tax and interest of the firms in order to have an optimum financing mix for their firms.