IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 1 2025
DOI: 10.56201/jafm.v11.no1.2025.pg1.21

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Board Attributes on the Cost of Capital (WACC) of Listed Pharmaceutical Firms in Nigeria

Anietie Sunday Ekpo, Dr. Eno Ukpong, Dr. Emmanuel Emenyi

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Abstract

This study examined the effect of board attributes on the cost of capital (WACC) of listed pharmaceutical firms in Nigeria, focusing on board size and board independence. The population of the study comprised seven pharmaceutical firms listed on the Nigerian Exchange Group from 2014 to 2023. The specific objectives were to examine the effect of board size on WACC, to establish the effect of board independence on WACC. The study employed an ex-post facto research design and used panel least squares regression for data analysis via Eviews 10.0. The findings revealed that board size and board gender diversity had an inverse and statistically non significant relationship with WACC. The study concluded that board attributes have a significant influence on the cost of capital for listed pharmaceutical firms in Nigeria, with board independence having the most significant impact. Thus, it was concluded that board size has significant effect on weighted average cost of capital of listed pharmaceutical firms in Nigeria. Based on these findings, the study recommended that pharmaceutical firms in Nigeria maintain an optimal board size and also increase the proportion of independent directors to improve corporate governance and reduce the cost of capital.

keywords:

Cost of Capital, Board Attributes, Corporate governance

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