IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 9 NO. 10 2023
DOI: https://doi.org/10.56201/ijssmr.v9.no10.2023.pg1.13

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An Assessment of Capital Structure Decisions among Listed Deposit Money Banks in Nigeria

Ibukun-Falayi, Owoola Rekiat

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Abstract

This study aimed to assess Capital Structure Decision among listed Deposit Money Banks (DMBs) in Nigeria by assessing the effects of total equity and debts on capital structures of DBMs in Nigeria. The study alsocorrelated asset tangibility to firm size and examined the effect on the capital structure of the Banks. The study used secondary data collected from the annual accounts and reports of the selected ten (10) banks purposively selected for twelve (12) years covering 2011- 2022. The study’s population is made up of twenty-four existing listed deposit money banks on the list on the Nigerian Exchange Group plc based on the availability of data. The study employed explanatory variables of total equity, total debt, asset tangibility, and firm size to capture financial statement components. Data was analyzed using descriptive analysis and panel regression models. Findings revealed that equity, debts, and assets tangibility have positive and significant effects on the capital structure decision of the selected banks, while the firm’ size does not. The study concluded that equity capital, debt capital, and long-term assets are relevant in capital structure decision of listed deposit money banks in Nigeria. It is recommended that management should carefully assess the appropriate mix of equity and debt that maximizes income potentials and continuity of the firm in the context of substantial tangibility of the assets.

keywords:

Capital Structure, Total Equity, Total Debts, Asset tangibility, Firm’s size

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References:

Abata, M. A., Migiro, S. O., Akande, J. O. & Layton, R., (2017), Does capital structure impact on
the performance of South African Listed Firms? ACTA Universitatis Danubius, 1(3), 334-
350.
Abeywardhana, D. K.Y., & Magoro, K. M. R. (2017). Debt capital and financial performance:
a comparative analysis of South African and Sri Lankan listed companies. Asian Journal
of Finance & Accounting,9(2), 103-127.

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