EXPLORING INVESTOR'S DECISIONS IN ESTIMATING THE EFFECT OF EARNING PERSISTENCE, FINANCIAL LEVERAGE, FOREIGN OWNERSHIP ON COMPANY REPUTATION AND VALUE IN NIGERIA
Dr.Ebe Emmanuel Chukwuma, Dr. Nwankwo Peter Emeka, Caroline Obiageli Nnamani
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Abstract
This study evaluates the effect of exploring investors decisions in estimating the effect of earning persistence, financial leverage, foreign ownership on company reputation and value We used multiple regression models on secondary data obtained from the annual and accounts of sampled consumer firms listed in Nigeria Stock Exchange spanning for ten (10) year from 2012-2021. The findings revealed that earnings before interest and tax (EBIT) and market capitalization (MCAP) are positively correlated though not significant at P- value. On the other hand, it can be deduced that the sensitivity of market capitalization to the control variable asset tangibility (at) is statistically positive and insignificant at P-value = 0.502 also but that has a positive and significant effect on financial leverage. It was documented that there exist perfect relationships between asset tangibility, financial leverage and natural logarithm of total assets connoting presence of colinearity. It is easily adjusted using colinearity diagnostics given the non-existence of both lagged values and dummy variables. The implication of the finding revealed that earnings before interest and tax (EBIT) and market capitalization (MCAP) are positive and can be used in predicting the movement of predictors variables regarding regressand; financial leverage, earnings before interest and tax and foreign ownership of consumer firms in Nigeria. The study hereby recommends that: consumer firms should not rely on debt financing but as well lay hand on the other means of increasing its working capital, thus; internal finance, general reserve etc. Above all, there will be collaborate between the firm and foreign partnership to improve financial performance, they should also focus on increasing wealth of the firm ensuring that the firms investors have their return on investment as when due.. Finally, firm management should adjust its administrative expense in order to increase profit for the year to encourage prospective investors.
Keywords: Return on investment, earnings and growth, foreign investors and profitability
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EPRA International Journal of Economics, Business and Management Studies (EBMS)
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Published on : 2023-12-20
Vol | : | 10 |
Issue | : | 12 |
Month | : | December |
Year | : | 2023 |