(2000-2010) - repository.unn.edu.ng
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APPRAISAL OF THE RELATIONSHIP BETWEEN COST .·OF CAPITAL AND INFLATION RATE IN NIGERIA (2000-2010) BY AKPARHUERE, GODWIN OGHENEKOHWO PG/MBA/09/54177 BEING A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF MASTERS DEGREE IN BUSINESS ADMINISTRATION (MBA), IN ACCOUNTANCY JUNE, 2011. ii UNIVERSITY OF NIGERIA NSUKKA
Transcript of (2000-2010) - repository.unn.edu.ng
APPRAISAL OF THE RELATIONSHIP BETWEEN COST
. ·OF CAPITAL AND INFLATION RATE IN NIGERIA
(2000-2010)
BY
AKPARHUERE, GODWIN OGHENEKOHWOPG/MBA/09/54177
BEING A PROJECT REPORT SUBMITTED IN PARTIAL
FULFILLMENT FOR THE AWARD OF MASTERS DEGREE IN
BUSINESS ADMINISTRATION (MBA), IN ACCOUNTANCY
JUNE, 2011.
i i
UNIVERSITY OF NIGERIA NSUKKA
ABSTRACT
This study is appraisal of the relationship between cost ofcapital and inflation rate in. Nige.ria (2000-2010). The ob?ectivesare to establish the relationship between cost of capital andinflation; to examine the relationship between GDP andInflation rate; to examine the trend in cost of capital over theperiod of study; to determine the degree of associationbetween GDP, inflation rate and cost of capital; and todetermine whether GDP is dependent on cost of capital.Hypotheses were also tested on each of the objectives, todetermine if the claims are true or not. Many contributions ofwriters were also examined to enrich the body of this report. Inthe opinion of these scholars, cost of capital and inflation rate,are two very important forces in Economics, Business andFinance. Even the government has to grapple with the reality ofinflation just as investors must deal with issues of cost andprofits. The data were collected through secondary method.The tools of analyses are regression analysis, correlation coefficient, student t-test and Analysis of Variance (ANOVA). Theanalyses revealed that there is a weak relationship betweencost of capital and rate of inflation; cost have negativevariability with inflation; the trend over the years do not revealany significant change in inflation rate; there is a significantand almost perfect negative correlation between GDP and costof capital; cost of capital is inversely related to the years; andthere is no real relationship between GDP, inflation rate andcost of capital. The objectives of the study were realized fullyand it was recommended that investors should treat theconcepts of cost of capital and inflation with some degree ofindependence; that government should make decisions thatwould streamline and stabilize the nation's economy; and thatthe methods of obtaining cost of capital by different scholarsshould be harmonized.
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UNIVERSITY OF NIGERIA NSUKKA
