Capital Structure and Firm Value: Empirical Evidence from Ghana
Samuel Antwi, Ebenezer Fiifi Emire Atta Mills, Professor Xicang Zhao

Abstract
This study seeks to provide evidence on the impact of capital structure on a firm’s value. The analysis was implemented on all the 34 companies quoted on the Ghana Stock Exchange (GSE) for the year ended 31st December 2010. 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 Ghana, equity capital as a component of capital structure is relevant to the value of a firm, and Long-term-debt was also 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 impacts more on a firm’s value.

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