Equipment Leasing: A Facet of Corporate Financing Strategy

¹ALEXANDER OLAWUMI DABOR AND ²AYODEJI LASUNKANMI ADENIYI

¹Accounting Department University of Benin

²Department of Accountancy Yaba College of Technology Yaba-Lagos, Nigeria

E-mail: aayoadeniyi@gmail.com

ABSTRACT

The study examines leasing as a facet of corporate financing strategy in Nigeria. Structured questionnaire was used to elicit responses from the field. The data generated were tested using the Z-test and ANOVA statistical tool. The analysis shows that there is a significant negative relationship between corporate performance and sale lease back. The result also reveals that it is cheaper to lease equipment than to purchase outrightly. Our findings further reveal that there is significant difference between the cost of obtaining loan from financial institution and cost of leasing equipment in Nigeria. We recommend that captain of industries in Nigeria should take advantage of leasing option in acquisition of equipment, and Nigeria government should also re-visit tax laws with regards to leasing as available financing option.