ABSTRACT

The aim ofthis research study is to examine the effect of non-debt tax shield on the financial performance of listed firms in Nigeria, using secondary data obtained from 5 agricultural manufacturing companies that are listed on the Nigerian Stock Exchange (NSE) for the period 2009 to 2018 out of which 4 companies that met the minimum data criteria were utilized. The Expost Factor Research design and descriptive statistics is used to summarize the collected data in a clear and understandable way using numerical approach. The simple linear regression technique using ordinary least square regression (OLS) method is adopted in investigating the relationship between financial performance (proxied by return on asset and return on investment) and non debt tax shield([proxied by depreciation and amortization cost). In relation to the study’s objectives which were to examine the effects of depreciation and amortization cost on the return on assets and return on investment of listed firms in Nigeria, two null hypotheses were formulated and tested at 5% level ofsignificance. The analysis result reveals that non debt tax shield has a positive insignificant effect on return on asset of listed firms in Nigeria and also, non debt tax shield has a positive significant effect on return on investment oflisted firms in Nigeria. This research explores the effect of non debt tax shield on the financial performance of listed firms in Nigeria. Moreover, that observed findings could assist the corporate sector management as well as policy makers to take appropriate decisions in their fields. It is recommended that the listed agricultural firms should strive to maintain the level of investment expenditure included in their capital structure choice in other to avoid an adverse cost of shielding against the cost of raising such debt and also, consider highly the need to source alternative financing choice than the equity investment in assets since it is certain the cost ofshielding against the transactional cost ofraising debt increases in proportionate to the amount oflong-term debt.