CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

All forms ofbusiness organisation whether large or small need money to startand to meet their

daily and long-time obligations if they want to maintain a going concern status. These

businessesexist to achieve various goals which includeprofit maximization, shareholder value

maximization, sale volume and sale revenue maximization, increased market share, survival,

ethical goal, and satisficing. Achieving these goals translates into meeting harmonized

expectations of stakeholders.Focal to this sought-after accomplishment is informed consideration

of financing channels available to the firm. The financing optionsavailable to a firmare debt or

equity which forms itscapital structure. According to Chechet, Garba and Odudu (2013), a

perfect combination of debt and equity is very important to the growth and future of a firm if

properly utilized. Thus, the importance of capital structure decisions in the a