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- Title
Sensitivity of Performance to Capital Structure.
- Authors
Akintoye, Ishola Rufus
- Abstract
This study is borne out of the need to establish the presence or otherwise of the responsiveness of EBIT. EPS and DPS as performance indicators to turnover, which is a measure of leverage, with respect to selected Food and Beverages companies in Nigeria. We computed the degrees) of Leverages) ratios - i.e the DOL, DFL, DCL, as well as the percentage change in DPS relative to percentage change in EBIT in order to achieve our study's objective- Results reveal that performance indicators used in our study are significantly sensitive to the capital structure, for moss of the companies considered in our study. Our findings also reveal that shareholders in most of the companies considered enjoy double benefits of dividend declaration and wealth creation: hence, the study disputes the present dividend theory which believes that organizations' shareholders either support dividend declaration or wealth creation and not the two in Nigeria.
- Subjects
NIGERIA; FINANCIAL performance; FOOD industry; BEVERAGE industry; FINANCIAL leverage; DIVIDENDS
- Publication
Banking & Finance Letters, 2009, Vol 1, Issue 2, p29
- ISSN
1308-6588
- Publication type
Article