Capital Budgeting Moderators and Shareholders Wealth Maximization in the Nigerian Commercial banks

Capital Budgeting Moderators and Shareholders' Wealth Maximization in the Nigerian Commercial banks

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Reference ID: PS-13927-TM

DEDICATION

This research material titled “Capital Budgeting Moderators and Shareholders' Wealth Maximization in the Nigerian Commercial banks” is dedicated to God for his enabling grace, and to all computer enthusiasts who contributed to make life a pleasant experience during my research documentation.

ACKNOWLEDGEMENT

I extend my sincere gratitude to all those who contributed to the completion of this project. Special thanks to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Business Administration and Management (BAM), Book Authors and Profound Scholars of existing or related project material on “Capital Budgeting Moderators and Shareholders' Wealth Maximization in the Nigerian Commercial banks” for their invaluable guidance, support, and expertise throughout the journey.

I am also grateful to your study area (mention any funding organizations, if applicable) for their financial assistance. This research would not have been possible without the encouragement and assistance of some stakeholders (mention any mentors, teachers, or colleagues). Additionally, I would like to acknowledge the understanding and patience of my family and friends during this endeavor. Your unwavering support has been a constant source of motivation. Thank you all for being part of this meaningful endeavor.

TABLE OF CONTENTS

PRELIMINARY PAGES

CHAPTER ONE

INTRODUCTION

    CHAPTER TWO

    LITERATURE REVIEW

    • 2.1 Introduction
    • 2.2 Conceptual Review
    • 2.3 Theoretical Framework
    • ⋮
    • 2.4 Empirical Studies

    CHAPTER THREE

    RESEARCH METHODOLOGY

    • 3.1 Introduction
    • 3.2 Research Design
    • 3.3 Population of Study
    • 3.4 Sampling and Sampling Technique
    • 3.5 Validation of Research Instrument
    • 3.6 Method of Data Collection
    • 3.7 Method of Data Analysis
    • 3.8 Questionnaire Administration
    • 3.9 Ethical Consideration
    • 3.10 Statistical Analysis

    CHAPTER FOUR

    DATA ANALYSIS, RESULT AND DISCUSSION

    • 4.1 Introduction
    • 4.2 Presentation and Analysis of Data
    • 4.3 Re-statement of Research Questions
    • 4.4 Test of Hypotheses
    • 4.5 Discussion of Findings

    CHAPTER FIVE

    SUMMARY, CONCLUSION AND RECOMMENDATION

    • 5.1 Introduction
    • 5.2 Summary of Findings
    • 5.3 Conclusion
    • 5.4 Recommendation
    • 5.5 Suggestion for Further Study

    REFERENCES

    APPENDIX A - “QUESTIONNAIRE”

    ABSTRACT

    Optimal investment decision maximizes the value of shareholders’ wealth, while achieving the goals of the corporation. However, making investment decisions takes into consideration internal and external factors and capital budgeting moderators: inflation, political instability, economic conditions and management attitude to risk. Based on economic theory, good capital budgeting should have a significant positive link with shareholders’ wealth, especially when the moderators are positively aligned in their decisions. However, the presence of failed or abandoned projects, in practice, indicates that this is not the case always. In view of this, it becomes imperative to seek new insight on how moderators of capital budgeting impact shareholders’ wealth in the banking sector in Nigeria.

    The study adopted the descriptive survey research design. The study population consisted of 53,528 members of staff of twelve commercial banks in Nigeria. Primary and secondary data were used in the study. Taro Yamane’s formula was used to determine the sample size of 397. Members of the sample were selected using simple random sampling technique. A self-developed questionnaire was used to collect primary data from top, middle and lower management staff of the selected banks. The questionnaire was validated, with a Cronbach’s alpha test yielding between 0.76 and 0.91 for the constructs of the variables. The response rate was 90.7 %. Secondary data were collected from the published financial statements of twelve purposively selected banks from 2004 to 2013. Descriptive statistics were used to analyze the secondary data, while multiple regressions analysis was used to analyze the primary data.

    The findings revealed that capital budgeting moderators had significant effect on dividend per share (R2 = 0.286, p<0.05). Profitability was significantly affected by capital budgeting moderators (R2 = 0.448, P<0.05), and there was a significant effect on retained earnings by capital budgeting moderators (R2 = 0.403, P<0.05). Similarly, capital budgeting moderators had a significant effect on market value (R2 = 0.404, P<0.05).

    In conclusion, capital budgeting moderators influenced shareholder’s wealth positively. It was therefore recommended that investment managers should factor in the influence of capital budgeting moderators on shareholders wealth when making investment decisions. This implies that bank managers should always take such factors as inflation, political instability, management attitude to risk and general economic conditions into account when taking investment decisions.

    Capital Budgeting Moderators and Shareholders’ Wealth Maximization in the Nigerian Commercial banks

    CHAPTER ONE

    1.1 Introduction

    … As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of technical terms.

    …

    CHAPTER TWO

    2.0 Literature Review

    2.1 Introduction

    This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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