CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE OF LISTED TELECOMMUNICATION COMPANIES NIGERIA

ABSTRACT

A firm's capital structure is a mix of the numerous sources of financing used by the company. A company's capital structure consists of equity, debt, and debt with preferred stock; this combination is known as the company's long-term financing mix. The main objective of this study is to Examined the effect of capital structure on performance of the listed telecommunication companies in Nigeria. The study used an ex-post factor research design. The study population consisted of 9 listed telecommunication companies on Nigeria Exchange Group (NGX). The Taro Yamane formula sampling technique was adopted to select a sample of seven (7) telecommunication companies. Data for this study were extracted from the published annual reports and accounts of the sampled companies and validated by the statutory auditors. Data were analyzed using descriptive and inferential statistics. The study found that short term debts, long term debts, equity and total debt had joint and significant effect on profit before tax, return on asset, return on equity and return on capital employed of Listed telecommunication companies in Nigeria. The study concluded that capital structure had significant effects on the performance of telecommunication companies in Nigeria. It was recommended that the management of the telecommunication companies should pay attention to the composition of capital structure in term of short term debt, long term debt, equity and total debt and should be careful and cautious in accumulating debt that could eventually have adverse effects on their value and financial performance.