Capital Structure and Firm Value in Nigeria (Evidence from Selected Quoted Firms)

The study examined the effect of capital structure on firm value of selected quoted firms in Nigeria. It adopted long term debt, equity capital, as independent (x) variables of capital structure while Tobin Q was used as proxy for firm value the dependent variable. It adopted ex-post facto research design. The statistical package used for the analysis was e-view version 8.0. The population of the study was firms drawn from conglomerate and consumer goods sectors of Nigeria Stock exchange for a period of nine (9) years 2007-2015. Descriptive statistics, correlation and ordinary least square (OLS) of multiple regression analysis were used to test the hypotheses formulated to guide the study. The coefficient of determination R2 showed that 65% systematic variations in firm value could be explained by the independent variables. The F value (62.44647) was significant at 1% which means that the parameters estimated were statistically significant in explaining the effect of the independent variables on the dependent variable. The study therefore, concluded that capital structure with regard to long term debt was negatively but statistically significant to firm value, while equity capital was positively insignificant to firm value. The study recommended that firms should be more concerned with management of equity capital in business financing since it is more related to the value of the firm