capital structure determinants of quoted firms in Nigeria and lessons for corporate financing decisions.

Financial arrangements determine how and the amount of financing that can be obtained from fund providers. An optimal allocation between equity and debt is
determined by the trade-off between the net tax advantage of additional corporate leverage and the costs associated with the increased likelihood of financial distress and reduced marketability of a firm’s corporate debt, and agency costs. To ascertain the determinants of this capital mix, research results from the regression analysis of data obtained from seventeen financially successful quoted firms in Nigeria show that this mix is positively determined by cost of equity, existence of debt tax shield, covenant restrictions in debt agreements, firm dividend policy, competitor’s capital mix and profitability; and negatively by cost of debt, parent.