Effect of Corporate Financing on Shareholders Wealth of Nigerian Consumer Goods Manufacturing Sector
- Post by: deqe
- November 5, 2025
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Olorunmola, Emmanuel Glory1* & Prof. Okwo Ifeoma Mary2
1 2Department of Accountancy, Enugu State University of Science and Technology, ESUT, Enugu State, Nigeria
ABSTRACT
This study examined the effect of corporate financing on shareholders’ wealth of Nigerian consumer goods manufacturing firms. The specific objectives were to ascertain the effect of total debt on market value, determine the effect of equity securities on market value and assess the effect of trade payable on market value of selected consumer goods firms in Nigeria. The study adopted an ex-post-facto research design, relying on secondary data sourced from the audited annual reports and financial statements of 15 listed Nigerian consumer goods manufacturing firms. The period under review covered ten years, from 2015 to 2024. Descriptive statistics and trend analyses were used to explore the data distribution and linearity, while a Panel Least Squares regression model was employed using EViews 11.0 to analyze the effect of the selected financing variables on market value. The findings revealed that total debt had a positive and significant effect on market value (Coefficient: 0.042117; P-Value: 0.0244), indicating that prudent debt utilization can enhance firm valuation. Equity securities had a positive but insignificant effect on market value (Coefficient: 0.019854; P-Value: 0.1942), suggesting limited investor responsiveness to equity issuance. Trade payable exerted a significant and positive effect on market value (Coefficient: 0.158902; P-Value: 0.0000), emphasizing the role of efficient payables management in boosting firm value. The overall implication of these findings is that the explanatory variables—Total Debt, Equity Securities and Trade Payable—jointly and significantly influence the market value of Nigerian consumer goods manufacturing firms. The study concludes that increases in these financing components, particularly debt and trade payable, are likely to enhance shareholder wealth when effectively managed. The research further underscores the importance of maintaining a balanced financing structure and careful risk assessment to optimize corporate financial performance. Consequently, it recommends that firm management prioritize strategic debt use and improve working capital management while exercising caution in equity issuance decisions.
Keywords: Corporate Financing; Shareholders’ Wealth; Market Value; Total Debt; Equity Securities; Trade Payable
Citation: Olorunmola, E. G. & Okwo, I. M. (2025). Effect of Corporate Financing on Shareholders Wealth of Nigerian Consumer Goods Manufacturing Sector. European Review in Accounting and Finance, 9(2), 26-38. DOI: https://doi.org/10.5281/zenodo.17533743
Copyright: ©2025 The Authors. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.