CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY The Modigliani-Miller theorem is one of the cornerstones of modern corporate finance. At its heart, the theorem is an irrelevance proposition; the Modigliani-Miller theorem provides conditions under which a firm’s financial mix does not affect its value. No wonder, Modigliani (1980, xiii) explains the theorem as follows: … Read more
INTRODUCTION BACKGROUND OF THE STUDY Capital structure refers to the mix of long-term sources of funds, such as debentures, long-term debt, preference share capital and equity share capital including reserves and surpluses (i.e. retained earnings). Some firms do not plan their capital structure, and it develops as a result of the financial decisions taking … Read more
CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF STUDY “Since the collapse of the oil boom in 1981, the Nigerian economy has undergone considerable strains and stresses. The pressure has been evident in the persistent deficits in balance of payments, low external reserves, deficit in government finances, mounting external debts etc”.( Central Bank of Nigeria,1992) The inherent … Read more