Capital Structure on 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. The study adopted an ex-post facto research design and population of the study consisted of six (6) listed conglomerate companies in the Nigerian Exchange Group (NGX). The entire six (6) listed conglomerate companies were used as sample size employing census sampling technique with a timeframe of ten years 2015-2024.  The methods of data analysis were descriptive statistics, unit root test and PMG/ARDL Model with the help of E-view 12. Findings revealed that; Short-term debt has a significant effect on market price per share of listed conglomerate companies in Nigeria in the long run but short-term debt has no significant effect on market price per share of listed conglomerate companies in Nigeria in the short run. Long-term debt has a significant effect on market price per share of listed conglomerate companies in Nigeria in the long run but long-term debt has no significant effect on market price per share of listed conglomerate companies in Nigeria in the short run. Share capital has a significant effect on market price per share of listed conglomerate companies in Nigeria in the long run but share capital has no significant effect on market price per share of listed conglomerate companies in Nigeria in the short run, and retained earnings has a significant effect on market price per share of listed conglomerate companies in Nigeria in the long run but retained earnings has no significant effect on market price per share of listed conglomerate companies in Nigeria in the short run, Based on the findings, the study concluded that, there is a significant effect of capital structure on firm value of listed conglomerate companies in Nigeria in the long run. The study recommended, among others, that, companies should carefully assess their capital structure decisions, considering the trade-offs between short-term debt utilization and current market benefits.