AFRICAN JOURNAL OF ACCOUNTING, FINANCE & MARKETING

The study investigated the effect of cost of capital (cost of debt and cost of equity) and profitability (return on capital employed) of listed commercial banks in Nigeria.  The study sampled seventeen (17) listed commercial banks on the floor of the Nigerian Exchange Group. Data of cost of capital measures (cost of debt and cost equity) and profitability (return on capital employed) were obtained from the annual reports and accounts of the listed commercial banks from 2017-2022. The study employed ex-post facto design. Data obtained were analyzed via descriptive statistics (mean, median, standard deviation, minimum, and maximum values, skewness, and kurtosis, Pearson correlation matrix); post-estimation statistics (variance inflation factor, heteroscedasticity, Ramsey RESET, Cameron and Trivedi’s decomposition of IM-test) and inferential statistics (random-effects LR panel data regression).  The random-effects LR panel data regression revealed that there is significant relationship between cost of debt and cost of equity and return on capital employed of the listed commercial banks firms in Nigeria. The study recommended that management of commercial banks need to ensure an adequate use or level of equity in financing their operations.  More so, there is the need for management of commercial banks to strengthen debt-mix in the formation of their capital structure.  The study contributes to knowledge by using Peckings Order theory in explaining the relationship between costs of capital and profitability of listed commercial banks in Nigeria and filled the gap in the accounting literature on how costs of capital influence the level of profitability of commercial banks in Nigeria.

This paper analyses how the Development Finance Institutions have been effective in crowding in foreign and domestic private investment in Nigeria between the year 2000-2023. The research used the Autoregressive Distributed Lag (ARDL) bounds testing methodology to assess the effect of DFI investment on the flow of the private capital using the Central Bank of Nigeria, World Bank and DFI annual reports and conditioned the effect on the macroeconomic situation and institutional quality. Findings indicate imbalanced effects of crowding in: DFI interventions largely crowd-in foreign but show statistically insignificant effects on domestic privates. The growth of GDP, institutional quality, and macroeconomic stability turn out to be important determinants to both types of investments, whereas oil prices and exchange rates have a disproportional influence on foreign investment. The results indicate that although DFIs are able to attract international investors with signaling and mitigating risk schemes, mobilizing domestic capital has to be supported by complementary policies such as financial sector deepening, risk-sharing specific instruments, and governance changes. The research provides empirical information on the effectiveness of DFI in the country-specific setting and should inform the development finance policy and operation strategies.

This Study investigate the association between firm capital structure and performance of some selected companies in Nigeria. Secondary data were carefully obtained from thirteen selected companies in consumer goods firms in industrial sector for a period of six financial year between 2017- 2022. The ordinary least square was used to regress the various capital structure components on firm financial performance. The findings from the study revealed that; equity capital has no significant effect on corporate financial performance. There exists a negative and statistically insignificant relationship between short-term debt and firm financial performance. Long-term debt has a positive relationship with firm performance but the relationship is not statistically significant at 5% level of significant. There exists a positive and statistically insignificant relationship between working capital and firm financial performance. The study recommends that the issuance of shares to the public should be controlled in order to minimize the amount of profit that will be distributed to shareholders as dividends. Long-term debt should be given more consideration as a source of finance because it has a positive influence on firm performance.

The broad objective of the study is to examine the relationship between mandatory audit rotation and audit quality of firms in Nigeria. The study made use of secondary data collected from randomly selected 50 companies out of the total 151 companies for a period of 5 years. The data collected were analysed using the Ordinary Least Square technique. The results from the regression revealed that audit fees had a positive and statistically significant relationship with audit quality in Nigeria. That means audit fees were found to be a strong factor that influences audit quality in Nigeria. It was also found that audit firm size had a positive but statistically insignificant relationship with audit quality and finally audit tenure had a negative and statistically insignificant relationship with audit quality. The findings showed that the number of years the auditor audits for a company has no influence on audit quality. The study  therefore recommends that policy makers should consider implementing flexible regulatory frameworks that allows a balance between mandatory audit rotation and the potential risks associated with abrupt changes in audit engagements.

Despite numerous reforms and steps taken by the Central Bank of Nigeria (CBN) to manage the financial sector, financial instability persists among the regulated deposit money banks, mainly due to capital inadequacy. This study examines how diversification affects the financial stability of 15 selected national and international deposit money banks in Nigeria from 2009 to 2024. Diversification was measured by income, asset, and fund diversification, while the capital adequacy ratio (CAR) represented financial stability. The study adopted an ex post facto research design alongside a fixed-effects panel regression analysis in STATA 16.0. The results reveal that both income and fund diversification have a positive and significant impact on CAR, whereas asset diversification exerts a positive but insignificant effect. Board size and Bank size, used as control variables, also have a significant positive influence on financial stability. The study concluded that effective diversification strategies can improve bank stability. It recommended that banks should focus on increasing income-generating activities, adopt innovative asset allocation strategies, and expand funding sources to strengthen capital adequacy and long-term resilience.