EXCERPT FROM THE STUDY
Adesina, Nwidobie and Adesin (2015) suggested that management of quoted banks in Nigeria consistently use debt and equity as a way of improving earnings, an indication of a significant relationship between capital structure and financial performance of firms. South African firms are characterized by ownership structures that display a top down chain of command, where the owner of the firm is at the top of the pyramid (Fosu, 2013). He adds that this kind of structure distinguishes the kind of agency problems faced by South African firms from those of other countries because they exist between minority and majority shareholders. This top down structure primarily depends on equity as a source of funds and debt contracts may only be adopted as a measure of mitigating the agency problem (Fosu, 2013)
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