CAPITAL STRUCTURE AND FIRM VALUE OF LISTED MANUFACTURING FIRMS IN NIGERIA

This study investigates the effect of capital structure on the firm value of listed manufacturing firms in Nigeria between 2015 and 2024. The study specifically examines the impact of equity financing and debt financing on firm value, measured using Q. The research is anchored on the traditional theory of financial structure, which posits the existence of an optimal mix of debt and equity that minimizes the cost of capital and maximizes firm value. Secondary data were obtained from the annual reports and financial statements of selected manufacturing firms listed on the Nigerian Exchange Group (NGX). Descriptive statistics, correlation analysis, and panel regression techniques were employed to analyze the data. The findings reveal that both equity and debt financing significantly influence firm value, although the magnitude and direction of their effects vary across firms and periods. The results support the traditional theory that moderate leverage enhances firm value, while excessive reliance on debt leads to a decline in market valuation. The study concludes that a balanced capital structure promotes financial stability and investor confidence in the Nigerian manufacturing sector. It recommends that managers should pursue optimal leverage policies that align with firm-specific characteristics and market conditions, while policymakers should promote access to affordable long-term financing to strengthen the industrial sector competitiveness and growth potential.