Capital Structure and Market Values of Companies

Abstract

The topic for the research has been selected with special interest to reveal the effect or benefit of capital structure and market value of companies. An appropriate capital structure is a critical decision for any business organization and this decision is very important not just because of  its need to maximized Shareholder’s wealth or increase the market value of companies but also because of the impact such decision has on the company ability to deal with the competitive environment. Furthermore, the institutional composition of the market was reviewed and it was revealed that the Nigeria stock exchange amongst all other participants is the live wire of the medium for the mobilisation of long funds for long term investment. Also the listing requirement of small and medium scale enterprises in the second tier securities market of the NSE equally highlighted. This project encompasses a comprehensive survey of companies, however, the prospect of the market appears to be bright considering the current position of the government and players in the industry in the area of formulation and implementation of favourable policies.  The market could assume the expected role of providing long-term financing for the development of small and medium scale enterprises in Nigeria if the institutional frameworks guiding the effectiveness of the operators are strengthened and the profound recommendation by the researcher are religiously implemented.