EFFECT OF CAPITAL STRUCTURE ON PERFORMANCE OF MULTINATIONAL
ENTERPRISES IN NIGERIA

1 Nwaorgu, Innocent. A. 2 Anierobi, Chioma A. & 3 Iormbagah, Jacob. A.
Department of Accounting, College of Management sciences,
Michael Okpara University of Agriculture Umudike. Umuahia, Abia State. 1 Corresponding author’s E-
mail: ianwaorgu@yahoo.com

Abstract
This study analyzed the effect of capital structure on performance of listed multinational enterprises in
Nigeria. The study used ex post factor research design and the secondary data gathered were analyzed
using multiple regression. The regression result shows a strong relationship between the independent
variables (Equity, Long term debt & Short term debt) and Profit after tax with a variation of 87.2%. In line
with the results revealed, equity is found to have a significant effect on the profit after tax while long term
debt and short term debt has no significant effect on the profit after tax of multinational enterprises in
Nigeria. It is therefore recommended multinational enterprises in Nigeria should always make policies and
capital structure financing decisions that inculcate more of equity capital in their finance mix since it is
found to effectively induce their performance. Also, he listed multinational enterprises should also explore
other debt capital available that are cheap so as to obtain more funds in order to burst their capital base
and improve their business performance.
Keywords: Equity, Long-term debt, Short-term debt and Profit after tax

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