Capital Structure and the Nigerian Stock Exchange

This study attempts to investigate the impact of capital structure on performance of quoted firms in the Nigerian Stock Exchange for thirty two firms for the period 2005 relationship between operating performance measured by return on asset (ROA) and return on equity (ROE) and capital structure variables with short-influence firm operating performance, namely, tangibility (TAN), liquidity (LIQ), non debt tax (NTD) and efficiency (EFF) are used as control variables. To achieve this objective, econometric f of data analysis. The result reveals that short term debt, long term debt and total debt have significant negative relationship with performance using return on asset and return on equity and tangibility and efficiency positive relationship with performance while non tax debt and liquidity shows negative relationship with performance. On the basis of result, the paper concludes that capital structure affects the performance of firms. Therefore, useful recommendations were provided to improve the capital structure and performance architecture of quoted firms using the optimal capital structure model