CAPITAL STRUCTURE AND FIRM VALUE OF LISTED CONGLOMERATE COMPANIES IN NIGERIA

Abstract

This study investigated the effect of capital structure on firm value of listed conglomerate companies in Nigeria by examining the effect of short-term debt, long-term debt, share capital and retained earnings on TobinQ of listed conglomerate companies in Nigeria. The study adopted an ex-post facto research design with all the listed six (6) conglomerate companies in the Nigerian Exchange Group (NGX) used as sample, employing census sampling technique. This study deployed descriptive statistics, unit root test and the PMG/ARDL Model analysis with the help of EViews 12.The study findings revealed that both short-term debt and long-term debthas significant effects on TobinQ of listed conglomerate companies in Nigeria in the long run but in the short run, there is an insignificant effect on TobinQ of listed conglomerate companies in Nigeria under the study period 2015-2024.Similarly, there is a significant effect of both share capital and retained earnings on TobinQ of listed conglomerate companies in Nigeria in the long run but in the short run, there is an insignificant effect of share capital and retained earnings on TobinQ of listed conglomerate companies in Nigeria under the study period 2015-2024. The study generally concluded that that there is a significant effect of capital structure on firm value of listed conglomerate companies in Nigeria in the long run and recommended among others that, management of conglomerate companies should prioritize short-term financing when planning for long-term goal over short-term goal, as it provides financial flexibility and reduces liquidity pressures.