Theory Of Capital Structure
The significance of this study will be classified under the following headings: practice, policy, literature and theory.
Practice: In practice, firms always intend to determine the optimal capital structure that minimises the weighted cost of capital and maximizes the financial performance. The study shall help the financial manager to identify those firm attributes that lower the weighted cost of capital and increase financial performance.
Policy: The conclusions and recommendations of the study shall provide the top management of manufacturing companies in Nigeria the guidelines to formulate policy in choosing appropriate set of firm attributes that may improve their future financial performance.
Literature: The current study shall serve
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Chapter one shall be introduction of the study, which includes, background to the study, statement of the problem, objectives of the study, research questions, hypotheses of the study, significance and scope of the study. Chapter two contain three sections which are conceptual framework, review of empirical studies and theoretical framework. The conceptual framework shall identify the major variables which the study intends to examine. The subsection includes concept of financial performance, concept of firm attribute and concept of capital structure and moderating factor. The review of empirical studies involve reviewing the information available from the previous research concerning the three relationships in which this study intends to investigate: The review of empirical studies on capital structure and financial performance; The review of empirical studies of the firm attributes and financial performance and The review of empirical studies on the moderating effect of capital structure on the relationship between firm attributes and financial performance. While, the theoretical framework provides extensive discussion of the major capital structure theories, that is trade off, pecking order and agency cost …show more content…
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