Shareholders’ Wealth Maximization, Capital Structure And Management Satisfaction In Nigeria Corporate Organizations: The Goal Mix Dynamisms

The study is an examination of the relationship between the shareholders’ wealth maximization objective of the firm and the management goal of increase remuneration and satisfaction. It is of note that this relationship do lead to agency problem-the age long dichotomy of corporate and personal objectives differences within the firm. The agency dichotomy is a subject of corporate governance. The study uses the agency theory, information asymmetry theory and the capital structure theory to examine the shareholders’ wealth maximization and the management personal wealth maximization (satisfaction). The study apply both survey and expost-facto research design technique, using structured questionnaire and secondary data from the financial report of selected firms of the firm.. The data span a period of 10years. The simple linear regression analysis, correlation coefficient, and t-test were used for the analysis of data collected. Findings from the study revealed that organization assets portfolio and leverage will impact on the shareholders’ wealth as measured by market value of the firm. However, dividend payment and timing of payment will more affect the value of the firm. Moreover, it was revealed that due to the asymmetric information dichotomy between the firm’s owners and management, hence management is able to pursue their personal satisfaction at the expense of the shareholders’ wealth maximization, The study recommended that business organization should strike a balance between investments in assets, Dividend payment and leverage as they influence the market value of the firm and hence the shareholders wealth. Shareholders should also seek more information about their firm than the statutory information in the financial report.

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