Journal of Finance and Accounting

ISSN (Print): 2333-8849

ISSN (Online): 2333-8857

Website: http://www.sciepub.com/journal/JFA

Current Issue» Volume 3, Number 1 (2015)

Article

The Effect of SMEs’ Cost of Capital on Their Financial Performance in Nigeria

1Department of Accounting, Faculty of Arts and Social Sciences, Gombe State University, Nigeria


Journal of Finance and Accounting. 2015, 3(1), 8-11
DOI: 10.12691/jfa-3-1-2
Copyright © 2015 Science and Education Publishing

Cite this paper:
Mohammed Ibrahim, Ali Ibrahim. The Effect of SMEs’ Cost of Capital on Their Financial Performance in Nigeria. Journal of Finance and Accounting. 2015; 3(1):8-11. doi: 10.12691/jfa-3-1-2.

Correspondence to: Mohammed  Ibrahim, Department of Accounting, Faculty of Arts and Social Sciences, Gombe State University, Nigeria. Email: mifili77@yahoo.co.uk

Abstract

Small and medium enterprises (SMEs) play an important role in the development of a nation’s economy. The reasons for this are the fact that SMEs provide benefits such as job creations, knowledge spillover, economic multipliers, innovations driver and cluster development in an economy. Given the importance of SMEs in an economy, it becomes quite plausible to look at factors affecting their financial performance which is a major determinant of their survival and growth. This paper examines the effect of SMEs cost of capital on their financial performance using a sample of five SMEs from the total population of eleven SMEs listed on the Alternative Securities Market (ASEM) of the Nigerian Stock Exchange Market during the five year period, 2008 – 2012. Data for the selected SMEs were generated and analyzed using linear regression technique. The result shows that SMEs cost of capital have insignificant effect on their financial performance (return on asset, ROA). The outcome of these finding, indicates consistency with prior empirical studies and provide evidence in support of Modigliani and Miller, M&M study, 1958. It is recommended that SMEs should utilize the opportunity created by ASEM to access long term financing as the costs have no effect on their performance.

Keywords

References

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[5]  Edelen, R. M. & Kadlec, G. B. (2013) Investor Base, Cost of Capital and Financial Performance: The Case of Post Issuance Anomalies; Seminar presentation, Hong Kong University of Science and Technology.
 
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6]  Fatoki, O. O. (2011) Impact of Human Social and Financial Capital on the Performance of Small and Medium Sized Enterprises (SMEs) in South Africa; Journal of Social Sciences, Vol. 29, No. 3, pp 193-204.
 
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9]  Modigliani, F & Miller M. H. (1958) The Cost of Capital, Corporation Finance and the Theory of Investment; American Economic Review, 48, pp 261-297.
 
10]  Mohammad, A. R. & Qamar, U. Z. (2011) Does Corporate Performance Predict the Cost of Equity Capital?; American Journal of Social and Management Sciences, Vol. 2, pp. 26-33.
 
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Article

The Major Environmental Problems in Congo Brazzaville: Case of Brazzaville

1School of Economics and Management, China University of Geosciences, Wuhan, PR China


Journal of Finance and Accounting. 2015, 3(1), 1-7
DOI: 10.12691/jfa-3-1-1
Copyright © 2015 Science and Education Publishing

Cite this paper:
Koua Stephen Faller, Pr Yang Shu Wang. The Major Environmental Problems in Congo Brazzaville: Case of Brazzaville. Journal of Finance and Accounting. 2015; 3(1):1-7. doi: 10.12691/jfa-3-1-1.

Correspondence to: Koua  Stephen Faller, School of Economics and Management, China University of Geosciences, Wuhan, PR China. Email: stephen_faller@yahoo.fr

Abstract

In the world in general and sub-Saharan Africa in particular, environmental issues interest and influence more and more all the actors of society namely economic policy makers, civil society and government. Congo Brazzaville in general and Brazzaville in particular, which is also one of the cities of developing countries is faced with proven degradation environment problems whose causes are mainly from human activities, natural phenomena and socioeconomic problems. This environmental degradation threatens the health of populations both urban and rural. Drastic measures must be taken against these problems. Thus, an awareness policy and necessary measures must be developed to educate, raise awareness among people to prevent potential hazards related to this issue of environmental degradation that has become worrisome and compromises already the lives of people in the city of Brazzaville particularly.

Keywords

References

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[5]  Diamouangana J., course of ecological planning, Master 1 Environmental Economics, University Marien Ngouabi, 2011, unpublished
 
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