Open AccessDEBT EQUITY AND SHARE PRICE PERFORMANCE OF MANUFACTURING COMPANIES LISTED IN NIGERIA
Author(s) -
a Oladunjoye,
O. Olawale.,
b Ogbebor,
Igoche David Peter,
Alalade Y.S.A
Publication year - 2021
Publication title -
international journal of advanced research
Language(s) - English
Resource type - Journals
ISSN - 2320-5407
DOI - 10.21474/ijar01/13206
Subject(s) - capital structure , hausman test , debt to equity ratio , equity (law) , return on equity , business , panel data , debt ratio , monetary economics , debt , share price , equity value , return on assets , economics , fixed effects model , finance , financial economics , econometrics , external debt , debt levels and flows , profitability index , stock exchange , population , demography , sociology , political science , law , nonprobability sampling
This study examined the impact of debt equity ratio on the share price performance of manufacturing firms listed in Nigeria between 2010 and 2019. The study adoptedan ex-post facto research design. A sample size of fifteen (15) listed manufacturing firms was used while panel regression models estimated using fixed effect model and random effect model, while the result of the Hausman test was utilized to select the appropriate model between fixed effect model and random effect model.The findings of the study reveals that the total debt to equity ratio is negative and significant influence on performance of share price {Coef. = -0.009 P-value > 0.05}. Return on Assets is also seen to be positive and significantly influence the performance of share price of listed manufacturing firm in Nigeria {Coef = 2.428 P-value = 0.000}. However, Size of firm {Coef. = -0.019 P-value = 0.344} is seen to have negative but insignificant effect on the performance of share price. The study therefore recommended that firm manager should cautious while using debt finance. Firm manager should consider the consequences of debt finance before making capital structure decision. They are supported to identify the optimum debt level and ensure that they are no use excessive amount of debt in capital structure.