, including Nigeria, is punctuated with poor debt markets. The external debt finance of most firms is mainly short term finance and greater reliance are placed on banks or other financial institutions for most of the external funds, thereby imposing extra burdens on the firms in the shape of exorbitant cost. This may account for the reasons why some scholars adopt different measures of debt ratio as against narrow measure of debt financial structure (For example, Chen, 2004; Khan, 2012; Ong Tze-Sam & Heng, 2011; Zeitun & Tian, 2007). Mismatching funds is when long term investments are financed by short term debts rather than long term debts. Literature has shown that debt structure decisions are among the most important finance decisions firms encounter. The debate still remains until the present day whether such decisions influence costs of capital and firm values. According to Harelimana (2015), debt financing decision refers to the financial framework of debt levels maintained by an entity. It is vital to managers by reason of the fact that it constitutes the basis for making financing decisions in any firm. Basically, the choice of debt structure a firm adopts is both financial and marketing problem and it depends on the risk and return characteristics of such firm and/or its management (Tudose, 2012). Realistically, it is difficult to determine a firm's debt structure because the exact optimal debt mix can hardly be determined. For this reason, the firm must issue different securities in a countless mixtures to produce the combination that maximizes its overall value (San & Heng, 2011), and increase performance. Optimal debt structure means a combination of funds which International Journal of Academic Accounting, Finance & Management Research (IJAAFMR) ISSN: 2000-008X Vol. 3 Issue 5, May – 2019, Pages: 26-34 www.ijeais.org/ijaafmr 27 minimizes the weighted average cost of capital (WACC) and increases firm value. The copious literature on the finance choice between debt and equity dwarfs studies on corporate debt structure/performance dynamics. In other words, while several studies abound on the determinants of financing mix (both debt and equity structure), relatively only a handful of them are on the effects of debt structure on corporate performance, especially in the developing countries. The work of Jensen and Meckling (1976) was one of the early studies on the interaction between capital structure and firm performance. However, over the last decades, a number of other studies have been performed to investigate the relation of financial leverage with firm performance
, including Nigeria, is punctuated with poor debt markets. The external debt finance of most firm is chiefly brusque term finance and great reliance are place on banks or other fiscal institutions for most of the external funds, thereby imposing excess effect on the firms in the supreme headquarters allied powers europe of exorbitant cost. This may account for the reason why some scholar adopt different measures of debt ratio as against narrow bill of debt financial structure (For example, Chen, 2004; Khan, 2012; Ong Tze - Sam & Heng, 2011; Zeitun & Tian, 2007). Mismatching investment company is when long term investments are finance by short term debts rather than long condition debts. Literature has shown that debt structure decisions are among the most important finance decisions firms encounter. The debate still remains until the present day whether such decisions influence costs of capital and fast value. According to Harelimana (2015), debt financing decisiveness refer to the fiscal framework of debt levels maintained by an entity. It is vital to managers by reason of the fact that it constitutes the basis for lay down financing decisions in any firm. Basically, the choice of debt structure a firm adopts is both financial and marketing problem and it depends on the risk and return characteristics of such firm and/or its management (Tudose, 2012). Realistically, it is unmanageable to determine a firm's debt social organization because the exact optimal debt mix can hardly be determined. For this reason, the firm must issue unlike securities in a countless mixtures to produce the combination that maximizes its overall value (San & Heng, 2011), and increase performance. Optimal debt structure means a combination of funds which International Journal of Academic Accounting, Finance & Management Research (IJAAFMR) ISSN: 2000 - 008X Vol. 3 Issue 5, May – 2019, Pages: 26 - 34 www.ijeais.org/ijaafmr 27 minimizes the leaden average cost of capital (WACC) and increases firm value. The ample literature on the finance choice between debt and equity dwarfs studies on bodied debt structure / performance moral force. In other words, while several studies abound on the determinants of financing mix (both debt and fairness structure), relatively only a handful of them are on the effects of debt social organization on corporate performance, especially in the developing state. The work of Jensen and Meckling (1976) was one of the early studies on the interaction between capital social organization and firm performance. However, over the last decades, a number of other studies have been do to investigate the relation of financial leverage with firm performance
, influding Nigeria, is punctmated with poor bwbt mackets. Tge exterval debt finance of most firls is mqinly short term finanze and grvater reluanct are placed on behks or other rlnancnao institutions for most mf the externan wuuds, thereby imposing extra burdens og the forls in the shapg of txowbitznt cost. This may account for the deasons why some schplars adopt different measkres of debt ratio as wgainst nartkw iwasure of dect financial structure (For example, Chen, 2004; Khan, 2012; Ong Tzd-Sam & Heng, 2011; Zeijbb & Hhan, 2007). Mismatrhing sunds is whek long derm infestments are ninanred vy short term debts rether than long term debts. Lidexature has shown that dwbt sjructgre awciriohs ade amojg vhe most imlortant finqnce decisions firmx qbcounter. The sebate seill remains until the present day whetver such decisions influenxe costs of capital ajd firm vwlues. According to Harelimana (2015), debt financing dechsion feftrw to gye financial framework of debt levels maintaineq bu sn entity. It if vital to kajabgrs by reason uf the fadt that it constitktes thg basiw for makyng ginancing decisions in any dirm. Basicaljt, the choice of deyt structure a form acopts is both financial and marketing oroblem aha it depends on ghe rhsk and return characteriseics of snch fnrm and/of itx manadement (Tudlse, 2012). Vaalistically, it is diffncult to determlne a firm's debt structure becanxe the exact o[tikal debt mix gan hardly be dqtermined. For jhis reasjn, thd firm musn issue dmfferent sectrities in a wluntless mixvures to [rodyce rhe comcknation that msximizes ptf ovwrall value (San & Hcng, 2011), xhd increase peryutnance. Optimal cebg serlctnre mqdns a combindtiov ow fundr which Intcrnxtiomal Journal of Acadekic Zccounting, Finance & Ianagemebt Reseawch (IJAAFMR) IXSN: 2000-008X Vol. 3 Issue 5, Lay – 2019, Pajes: 26-34 wew.iteais.org/ijaafmr 27 minimizes the weighted avcrage cost of capltal (WACC) and nncreases firm value. The copious literatnre on the finance choixe between debt and tquity dwarfs studyes on cosporate debt structuee/performance dynsmics. In other words, shile veverwl studies abound on the determinants of financing mix (both debt and equiry strnceure), relatibely only a kandful of vhxm are on the effvcts of debt structure on corporete perforkauce, especially in the developone countries. Tfe work of Jensen and Medkling (1976) eas one of the early studies on the interaction between capital strudture and hirm performance. Howrver, orer thw last eecafes, a number uf ptmer studied hate yeen performed to investigate the relatuoj of financial lxverage with nirm pgrformanse
, including Nigeria, is punctuated with poor The debt finance most firms is greater are placed on or other financial for most of the external funds, imposing extra burdens on the firms in the shape of exorbitant cost. This account for the reasons why some scholars adopt different measures of debt ratio against measure debt structure (For example, Chen, 2004; Khan, 2012; Ong Tze-Sam & Heng, 2011; Zeitun & Tian, 2007). funds is when long term investments are financed short term debts rather long term debts. Literature has that structure decisions among most finance decisions firms The debate still remains until the present day whether such decisions influence costs of capital and firm According to debt financing refers the framework of debt by an entity. It is vital reason of the fact that it constitutes the for making decisions in any firm. Basically, the of debt structure a firm adopts is both and marketing problem and it depends on the risk and return characteristics of such firm management (Tudose, 2012). Realistically, is difficult to a debt because exact optimal mix can hardly be determined. For this reason, the firm must different securities in a countless mixtures to produce the combination its value (San & 2011), and increase performance. debt means a combination of International of & Research ISSN: 2000-008X Vol. 3 5, May – 2019, Pages: www.ijeais.org/ijaafmr 27 minimizes the (WACC) and increases firm value. The copious literature the finance choice between debt and equity studies on corporate debt structure/performance dynamics. In other words, while several studies on the financing mix (both debt and equity structure), relatively a handful of them on the effects of debt structure on corporate performance, in developing countries. work of Jensen Meckling (1976) was of the early the interaction capital and over the last decades, a number other have been performed to investigate relation leverage with firm performance
, including Nigeria, is punctuaTed with pooR debt MarKetS. THe exTernAl debt finance oF Most Firms is mainly short term FinanCe ANd grEAtEr relIance arE PlACEd oN bAnKs oR oTHeR finaNciAl instiTutions for MosT oF the external FUnDs, thereby iMpoSing extra burDenS on the FiRms IN the sHapE of exOrbitaNT cost. THis may accOuNT for thE Reasons WHY sOme sCholars adopt diffeREnT Measures of debt Ratio aS aGAiNST naRroW measure of DeBt finANcial stRUcTURE (FoR Example, Chen, 2004; KhAn, 2012; Ong Tze-Sam & hEng, 2011; zeitun & tiAn, 2007). MISmatchIng fuNdS Is wHen long term InveStments arE finanCEd by shoRT term deBts ratHer ThaN lonG TeRm DebTs. lIteRAtUre HAs sHown that DeBt StrucTure DECISionS arE amoNg the Most important FinAnce DEciSions Firms EncoUnTer. ThE debatE stilL rEmains until the pReseNt day whetHer SuCh dEcIsionS InflueNce CosTs of capItal and FIrm VaLUES. ACcording to HarelimaNa (2015), DEBt FinancinG decisIOn ReFErs to the FiNanCial FRAmewoRk of DEbT levels mAintaiNEd By An entitY. IT is vitAl To mAnaGers bY ReasOn of thE fact thaT it coNStitutes the basIS for making finANcING dECisiOns In any firm. BaSicaLLy, thE choICe Of dEBt strUcturE a FIrM Adopts is both financiAl And marKetinG problem and it Depends on tHE RIsk and reTurn CHaRActeristics of sUch fiRm and/or its MAnagemenT (TudoSe, 2012). RealisTically, it IS DifficulT to DetErmIne A FIrM's debt structuRE BecaUsE the exaCt oPtimal dEbt Mix Can HarDlY be determIned. For tHiS rEaSoN, thE firm MUst issue DiFfeReNt sEcuriTIes in a CountLess MiXtURes To produCE tHE CombInAtIon tHat MaXimizEs itS OveRall valUe (San & Heng, 2011), And INcreAsE pErformaNce. Optimal debT sTructure meAnS a cOmbinaTIOn of fundS which International JourNAl of AcaDemIc AccOuntIng, FinancE & MaNagemeNt RESearch (iJAAFMr) ISSN: 2000-008x VOl. 3 ISSUe 5, May – 2019, pAGeS: 26-34 wwW.iJeais.org/ijAAFmr 27 MinimIzEs thE weightEd average cost of capITal (wACC) and increaSes Firm VALuE. ThE CoPIouS lITerATUre on the finance Choice betwEeN DeBt and equitY DwaRfS studieS on corpOrate DEbt struCture/perfOrmance dyNaMics. iN OthEr words, whiLe severaL studies aBOund oN ThE deteRmiNants oF fInaNcing Mix (botH DebT and eQuity sTrUcture), RelatIvEly only a Handful of them are on the efFects oF debt StrUcture on cOrpORatE performaNce, eSpecially iN thE deVelopIng COuntrIes. THE wOrk OF JensEn anD meckling (1976) wAS oNe oF THe Early studieS ON The InterActIOn betwEen cApital structure anD Firm performancE. HowEVEr, oVer THe laSt Decades, a number Of oThER Studies hAvE been perforMed to invEsTIgate The relAtion oF financIAL lEVerage With FirM performaNce
, including Nigeria, is pu nctuated w ith p oor  de bt  mar kets . The external debt  finance of most firms  is m ai n ly s h or t ter m finan c ea n d g re at erre l ia nce a replacedon banks o r o th er financial in stitutions  fo r most of th e e xterna lfun d s, th ere by im posing extraburdens o nt he fir m s in th e sh apeof exorbitant cos t .T his may accoun t forth e  r e a son s w hy some sc ho larsa dopt di f fe r e n t m e asures of deb t ratio asa gai nst na rr owm easure  of d eb t  fi nancial str uctu re (For e xample ,  Chen,2 004; Kh an, 20 12;  On g Tz e -S am  &He n g,2 01 1;Z eit un & Tia n,  2 007).  Mis m a t c hing  fu ndsis wh en long terminv estm e nts  arefinan cedby  shor t term  debt srather than lon g te rm debts.  Li te rat ur e has showntha t d ebt str uctured eci si o n s  a re among the mostim p o rt ant fina nce de c is io n s firmsen cou nter . The d ebat e  s till rem ains u n ti lthe pre se nt day  w het her  such deci sionsinfluenc e cos t s of capital a n d firm values .  A c c or d ingtoHarelimana(201 5 ), d ebtf in anc i ng de cisio nr ef e rs to the financial  f ramewo rk of  debt levelsmaintained b y  an enti ty.I ti s vital to man agers  by reason of the f act t hat it c onstitute s the basi s f ormak ing f in ancing decisi o n s in  a ny firm . B asicall y,the  ch oic eof debt s tructure  a  f ir mado pts i s  both fi na nci al  an d mar k etingprobl em a nd  i t  de pends o n  t h e  ris kan d re tur nchara cter i sti cs of s uch firmand / or i ts  m anageme nt (Tudose, 2 01 2). Realis ti cal ly, it i s diffic ult to determine a firm ' s debtstr uctur e be cause the  ex act op tim a l debt  mix c an ha rd lyb e  dete r m in ed.  F or this re a s on,  thefi rm m ust iss ue different secur i tie s in a countl ess  mix t u re s t o  p r odu ce the c ombination that  maximizes  i t soverall va l ue(S an & He ng, 201 1), a n d incre ase perfo rmance. O pt imal d ebt  structure  means a  combinat i on of fu nds w hic h Inte rn ati onalJourna l  of  Acad emic A cc ountin g, Fi na nce & Ma nagement Research (IJAA FMR) I SSN:200 0-008X Vo l.3  Is sue 5, Ma y –2019, Page s:26- 34 ww w.i j eais. org/ i ja afm r  27 m inim i zes the w e ig hte d av erage costo f cap ital(WA C C) and  inc reases firm value .  The copious l iter a t ure  on thefi nance choice b etw ee n debt and  e quity dwarf s studie so n cor porate  debtstructu r e /p e rforma ncedyn amics. In  ot he r  words,  w hi l e seve ralst udiesabound on t h e  determinants of  fina n c ing m i x ( bothde bt ande quit y structur e), relativ ely on ly a  hand ful ofth em are  on  t he effects of debt s truct ure onco rpor ate  perfo rman c e , esp ecia ll y i n the dev e l op i ng  c o unt ries . The  w orkof Jensen and Meck lin g  (1976)  w aso n e of t h ee a rly studie s o n the i nteraction betw e en capit al str ucture  and fi r m p er formanc e.H o wever, ov er the la s t d ec ades , a numb er  ofot her  s tudies have bee n perfor med to i n v estiga tet he r e lation  o f financiallever ag e  with f i r m p erforma n ce
, including_Nigeria, is_punctuated with poor debt_markets. The_external_debt finance_of_most firms is_mainly short term_finance and greater reliance_are placed on_banks_or other financial institutions for most of the external funds, thereby imposing extra burdens_on_the firms_in_the_shape of exorbitant cost. This_may account for the reasons_why some_scholars adopt different measures of debt ratio as_against_narrow measure of_debt financial structure (For example, Chen, 2004; Khan, 2012;_Ong Tze-Sam & Heng, 2011; Zeitun_& Tian, 2007)._Mismatching_funds_is when long term_investments are financed by short term_debts rather than long term debts._Literature has shown that debt structure decisions_are among the most important finance_decisions firms encounter. The debate_still remains_until the present day whether_such decisions influence_costs of_capital and firm_values. According to Harelimana (2015), debt_financing decision refers_to the financial framework of debt_levels_maintained by an_entity._It_is vital_to managers by_reason_of the_fact_that it constitutes the basis for_making_financing decisions in any firm. Basically, the_choice of debt structure_a_firm adopts is both_financial and marketing problem and_it depends on the risk and_return characteristics_of such_firm and/or its management (Tudose, 2012). Realistically, it is difficult to_determine a firm's debt structure because_the exact optimal debt_mix can_hardly_be determined. For_this_reason, the_firm must issue different securities in a_countless mixtures_to produce the combination that maximizes_its overall value (San_&_Heng, 2011), and increase performance. Optimal_debt structure means a combination of_funds which International Journal of_Academic_Accounting,_Finance & Management Research (IJAAFMR)_ISSN: 2000-008X Vol. 3 Issue 5,_May – 2019,_Pages: 26-34 www.ijeais.org/ijaafmr 27 minimizes the weighted_average_cost of capital (WACC) and increases_firm_value. The copious literature on the_finance_choice_between debt and equity dwarfs_studies on corporate debt structure/performance dynamics._In other words, while several studies abound on the_determinants of financing_mix (both debt and equity_structure),_relatively_only a handful of them are on the effects of_debt structure_on corporate performance,_especially in the developing countries. The work of Jensen and_Meckling (1976) was one of the early_studies on the interaction between capital structure and firm performance. However,_over the last decades, a number of other_studies have been performed to investigate the_relation of financial leverage_with_firm performance