Chapter 1-5

ABSTRACT

The debt-to-equity ratio of a firm determines how cash flows will be shared between debt holders and equity holders. In reality, capital structure of a firm is difficult to determine. Financial managers are difficult to exactly determine the optimal structure. The main objective of this study is to determine the effect of capital structure on the performance of quoted Manufacturing firms in Nigeria. The study used multiple regression analysis of the ordinary least square analysis in testing the hypothesis considered in this study, and the statistical analysis was done using SPSS. The result reveal that, Leverage has significant effect on the performance of quoted Manufacturing firms in Nigeria showing that firm that has high profitability and good performance have less debt. It is therefore recommended that, management of quoted manufacturing firms should work very hard to improve the leverage of their quoted Manufacturing firms in order to increase the returns on equity, return on assets and investment. They can do that by ensuring that capital structure is optimal.