EFFECT OF CAPITAL STRUCTURE ON VALUE OF LISTED INSURANCE COMPANIES IN NIGERIA
Zakariyya, Musa Mohammad, A. D. Zubairu, PhD and Naburgi, Musa Mohammed, PhD
Volume 5 Issue 2
Abstract
The capital structure is a crucial aspect of corporate governance and firm value, understanding its implications allows companies to make informed decisions to enhance their value and governance practices. This study examines the effect of capital structure on value of listed insurance companies in Nigeria. The study adopts ex post facto research design using panel data of ten years 2014-2023 to examine the effect of independent variables debt-to-equity ratio, institutional ownership and firm size on the dependent variable firm value. The population of the study consist of all insurance companies listed on the Nigerian Exchange Group as at 31st December, 2023. In view of this, sixteenth (16) insurance companies listed on Nigerian Exchange Group were selected to represents the sample size for this study using purposive sampling technique based on the criterion that insurance companies must be listed and disclosed all the data needed for the study in the annual reports. Secondary data was used and data were sourced from the audited annual reports and accounts of the sample insurances companies. The multiple regression technique was used with the aid of EViews 10 to analyze the data. The findings shows that, institutional ownership has positive and insignificant effect on firm value of listed insurance companies in Nigeria. While debt-to-equity ratio and firm size has positive and significant effect on firm value of listed insurance companies in Nigeria, The study recommends that increase in the value of company will be greater if the debt from the company can also increase profitability from the company, provided that the debt does not exceed its optimal point. Keywords: Capital Structure, Institutional Ownership, Firm Size, Firm Value,
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