CAPITAL STRUCTURE, AGENCY COST, AND PROFITABILITY OF INFORMATION AND COMMUNICATION TECHNOLOGY COMPANIES IN NIGERIA

This study looks at the connection between capital structure, agency cost, and profitability of Information and Communication Technology (ICT) companies that are listed on the Nigeria Exchange Group. Specifically, it examines how debt ratio, equity ratio, CEO compensation, audit fees, and their interactions influence profitability. The study covers nine ICT companies listed on the Nigerian Exchange Group as at December 31, 2023, thereby using the entire population as the sample for a comprehensive analysis. Data were sourced from annual reports of the listed firms spanning from 2014 to 2023, The data sourced were analyzed using panel least squares regression. The results indicate that debt ratio, equity ratio, CEO compensation, audit fees, and the interaction between CEO compensation and equity ratio significantly affect profitability. However, the moderating effect of audit fees relative to equity does not show a significant impact. Based on the findings, the study recommends increased reliance on equity financing, implementation of performance-based CEO compensation structures, and efficient audit cost management without compromising audit quality. These strategies aim to enhance profitability in Nigerian ICT firms.