dc.contributor.author | Thauti, Samuel M | |
dc.date.accessioned | 2013-11-13T07:30:30Z | |
dc.date.available | 2013-11-13T07:30:30Z | |
dc.date.issued | 2013-10 | |
dc.identifier.citation | Degree of Master of Science in Finance | en |
dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/58817 | |
dc.description | Research project submitted in partial fulfillment of
the requirements for award of the Degree of Master
of Science in Finance, University of Nairobi | en |
dc.description.abstract | Decision making on capital structure is one of the most challenging and difficult issues
facing the companies. The capital structure of a company is a combination of debt and
shareholders equities. Empirical research has shown controversial evidence on the relation
between capital structure and shareholder value and the ambiguous results that have emerged
regarding the existence of a relation between capital structure and shareholder value. This
study sought to answer the following research question is there a relationship between capital
structure and shareholder value for companies listed in the Nairobi Securities Exchange?
The causal study design that was employed in this research. The study population was
composed of all 60 companies listed at the NSE. The study sampled 40 companies which
were stratified by time periods for a period of five years between years 2007 to 2011. The
data collected from the secondary source was quantitative in nature. Data analysis was done
using SPSS Version 20 whereby inferential statistics was applied whereby a multiple
regression model was employed. The empirical model was used in the study to test the
relationship between capital structure and shareholder value for companies listed in the
Nairobi Securities Exchange.
The findings of the study confirmed that there exists a negative relationship between leverage
and Market to Book ratio. The study recommends that companies at NSE must follow the
financing hierarchy as postulated by the pecking order concept i.e. internal funds should be
used before debt financing and then equity as equity and debt financing are more expensive
and they reduce shareholder value in the company compared to internal funds. | en |
dc.language.iso | en | en |
dc.publisher | University of Nairobi | en |
dc.title | The Relationship Between Capital Structure and Shareholder Value for Companies Listed in the Nairobi Securities Exchange | en |
dc.type | Thesis | en |
local.publisher | School of Business | en |