THE IMPACT OF FINANCE COST ON SHAREHOLDERS' WEALTH MAXIMIZATION IN NIGERIA'S LISTED OIL AND GAS FIRMS

This study explored the interplay between finance cost and shareholders wealth maximization of listed oil and gas companies in Nigeria. It therefore focused on the positivist paradigm and adopted the ex post facto method of research design. Four listed oil and gas companies were randomly selected as samples for investigations. The annual financial statements of these companies were the source of the secondary data collected for the study. Applying the Pearson correlation model as the tool of analysis on the data gathered, the investigation showed that finance cost does not significantly impact on price earnings ratio which indicated a negative correlation of -0.018 with a significant value of 0.912. The investigation further revealed that finance cost does not significantly impact EPS with a significant value of 0.614 and correlation value of 0.082, the correlation is positive but very weak. The study concluded that finance cost does not significantly impact on price earnings ratio and earnings per share of listed oil and gas companies in Nigeria. Thus, the research recommended that the management should ensure optimal gearing that would enhance earnings in order to boost companies P/E ratio without overshooting debt servicing obligations; and that borrowed funds should be channeled to areas that will boost profits in order to enhance EPS which is a key performance indicator.