Capital Structure and Firm Value: Empirical Evidence from Nigeria
OGBULU, Onyemachi Maxwell.; EMENI, Francis Kehinde

Abstract
This study seeks to provide evidence on the impact of capital structure on a firm’s value. The analysis was implemented on a sample of 124 companies quoted on the Nigerian Stock Exchange (NSE) for the year ended 31st December 2007. The ordinary least squares method of regression was employed in carrying out this analysis. The result of the study reveals that in an emerging economy like Nigeria, equity capital as a component of capital structure is irrelevant to the value of a firm, while Long-term-debt was found to be the major determinant of a firm’s value. Following from the findings of this study, corporate financial decision makers are advised to employ more of long-term-debt than equity capital in financing their operations since it results in a positive firm value.

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