Moderating Effects of Cost of Capital on Equity Financing and Firm Value in Nigeria

Auwalu Sani Ibrahim () and Muazu Saidu Badara

Academic Journal of Economic Studies, 2020, vol. 6, issue 3, 81-84

Abstract: The study analyzes the moderating effects of cost of capital on equity financing and firm value. Whereas, micro panel analysis techniques was utilised for the companies under study spanning 2006-2016. Secondary data were obtained through the companies’ individual annual reports and data base of Nigerian Stock Exchange. The study utilizes a sample of 12 listed industrial goods companies in Nigeria. While, hierarchical moderated multiple regression was applied for the estimate. The outcome revealed a positive association among equity financing and value of listed industrial goods companies in Nigeria. While, cost of capital as a good moderator, it was emphasize that, equity financing and cost of capital are drivers of enhance value of the firm among listed industrial goods companies. It was recommended among others that, the finance manager should emphasize on the viable cost of capital for their firm operation. Hence, equity financing should be given greater priority than debt financing in order to enhance the value of firm.

Keywords: Cost of capital; equity financing; firms value; OLS; Nigeria (search for similar items in EconPapers)
JEL-codes: M10 M11 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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