CAPITAL STRUCTURE, MANAGERIAL OWNERSHIP AND FAIR VALUE

ABSTRACT

The study examined the Capital Structure Techniques, Managerial Ownership and Firm Value. The study focused on all the entire financial companies listed on the Nigerian Exchange Group (NGX) as at 31st of December, 2022. In the light of the research hypotheses a multiple regression model was used for this analysis. Findings revealed that Managerial ownership (MANOWNS) had a positive and statistically significant relationship with firm value proxied by TOBINQ for the period of the study as shown in our estimation of the variable. The findings also revealed that Managerial Ownership (MOSHIP) is a strong determinant of firm value in Nigeria. Based on this study, it was recommended that the managers who are in the helm of affairs of the company should be allowed to control up to 50% or more of shares allotted in the company, this gives them too much power and control over other shareholders which may be responsible to constrain the opportunistic behaviours exhibited by the managers in a bid to get short-term private gains, it was also recommended that company should avoid taking on debt with a high interest rate and instead rely more on retained earnings to sustain their operations. This is in line with the perking order theory, which claims that for superior firm value, Nigerian firms should maximize their capital structure by utilizing the right debt-to-equity ratio.