Effect of Financial Leverage on Performance of Listed Firms in Nigeria

Academic Paper , 2021 , 39 Pages , Grade: 4.5

Business economics - Banking, Stock Exchanges, Insurance, Accounting

This paper analyzes the effect of financial leverage on firms’ performance. The aim was to study the implications of financial leverage on firms performances. Also considering that maximizing accounting profit and maximizing shareholders value are not identical because of shareholders losses from agency costs, it was therefore pertinent to see how capital structure affect shareholders value.

The objective of the study was to identify the possible effects of financing leverage on the performance of the company, to establish the relationship between leverage and corporate performance of listed firms in Nigeria, to determine the extent to which capital structure affect shareholders returns, to determine when the shareholder’s wealth can be said to have been maximized given a particular capital structure and to analyze the debt and equity which might result in over capitalization of the firm. The research was designed to collect data through a survey method from five listed firms - Dangote Sugar Refinery, Nestle, Flour Mills, Cadbury, and Nigerian Breweries. Descriptive design (percentages) was used to explain the effect of financial leverage on company’s performance; while analytical design (correlational statistical method) was used to establish the relationship between financial leverage and corporate performance.

Inhaltsverzeichnis (Table of Contents)

• CHAPTER ONE: INTRODUCTION
• 1.1 Background to the Study
• 1.2 Statement of the Research Problem
• 1.3 Objectives of the Study
• 1.4 Research Questions
• 1.5 Research Hypothesis
• 1.6 Significance of the Study
• 1.7 Scope and limitation of the Study
• CHAPTER TWO: LITERATURE REVIEW AND THEORITECAL FRAMEWORK
• 2.1 Background Study of Cadbury Nigeria Plc
• 2.1.1 Brands
• 2.2 Review of Empirical Studies
• 2.3 Theoretical Framework
• 2.4 Conceptual Framework
• CHAPTER THREE: RESEARCH METHODOLOGY
• 3.0 Introduction
• 3.1 Population of the study
• 3.2 Sampling and sampling procedure
• 3.3 Sources of Data Collection
• 3.4 Primary Data
• 3.5 Method of data collection
• 3.6 Data analysis technique
• CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION
• 4.0 Introduction
• 4.1 Socio-Demographic Characteristics of the Respondents
• 4.2 Financial Leverage
• 4.3 Effect of Financial Leverage on Firm's Performance
• 4.4 Effect of Capital Structure on Shareholders' Returns
• 4.5 Hypotheses Testing
• CHAPTER: SUMMARY, CONCLUSION AND RECOMMENDATIONS
• 5.0 Introduction
• 5. Summary

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This paper analyzes the effect of financial leverage on firms' performance. The study examines the implications of financial leverage on firm performance, considering how capital structure affects shareholder value. It aims to identify the effects of financing leverage on company performance, establish the relationship between leverage and corporate performance of listed firms in Nigeria, determine the extent to which capital structure affects shareholder returns, and analyze the debt and equity that might result in over-capitalization. Here are some key themes explored in the paper:

• The impact of financial leverage on firm performance
• The relationship between capital structure and shareholder value
• The effects of financial leverage on corporate performance in Nigeria
• The relationship between leverage and shareholder returns
• The optimal capital structure for maximizing shareholder wealth

Zusammenfassung der Kapitel (Chapter Summaries)

• Chapter One: Introduction: This chapter provides the background of the study, outlines the research problem, states the objectives of the research, presents research questions and hypothesis, discusses the significance of the study, and details the scope and limitations of the research.
• Chapter Two: Literature Review and Theoretical Framework: This chapter presents a background study of Cadbury Nigeria Plc, reviews empirical studies on the topic of financial leverage and firm performance, and discusses the theoretical framework and conceptual framework used for the research.
• Chapter Three: Research Methodology: This chapter outlines the methodology used for the study, including the population of the study, sampling procedures, sources of data collection, data collection methods, and data analysis techniques.
• Chapter Four: Data Presentation, Analysis and Discussion: This chapter presents and analyzes the data collected for the study, including socio-demographic characteristics of respondents, financial leverage, the effect of financial leverage on firm performance, the effect of capital structure on shareholder returns, and hypothesis testing results.

Schlüsselwörter (Keywords)

Financial leverage, capital structure, firm performance, shareholder value, corporate performance, shareholder returns, listed firms, Nigeria.

• College: Ahmadu Bello University
• Grade: 4.5
• Author: Okolie Ugochukwu Jude (Author)
• Publication Year: 2021
• Pages: 39
• Catalog Number: V1305267
• ISBN (PDF): 9783346775351
• ISBN (Book): 9783346775368
• Language: English
• Tags: Financial Leverage Performance