dc.contributor.author | Mugera, Betty W | |
dc.date.accessioned | 2013-11-21T13:00:25Z | |
dc.date.available | 2013-11-21T13:00:25Z | |
dc.date.issued | 2013-10 | |
dc.identifier.citation | Master Of Science In Finance, University of Nairobi, 2013. | en |
dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/59788 | |
dc.description.abstract | This study investigates the effect of foreign exchange risk management on firm value with
specific reference to those listed at the NSE. With the world becoming a global village more
firms are being exposed to foreign exchange risk requiring them to seek ways of shielding
themselves against the vice.
This being a descriptive study that sought to establish the effect of foreign exchange risk
management on the value of a company, the research design used is cross-sectional design. Data
was gathered for a period of five years from the year 2008 to the year 2012 based on twenty nonfinancial
companies listed at the NSE. These are companies that are either derivative user’s, are
exporting firms, have foreign denominated debts or have subsidiaries abroad.
Research findings on the topics have yielded different results leaving a gap as to whether
hedging foreign exchange risk really does affect firm value. To test this, Tobin’s Q model has
been employed in calculating firm value and the study has found that hedging foreign exchange
risk does not significantly contribute to firm value. The results add new evidence to the current
literature that have reported conflicting empirical findings from prior research.
To better manage risks, firms should therefore understand the risks they are exposed to by
developing a risk profile. This will enable firms take on the various options of either letting the
risk pass through, protecting themselves by using the hedging instruments or intentionally
increasing exposure to some of the risks especially where managing the risk is insignificant. | en |
dc.language.iso | en | en |
dc.title | The effect of foreign exchange risk management on the value of firms listed at the Nairobi Securities Exchange | en |
dc.type | Thesis | en |
local.publisher | Department Of Finance And Accounting University Of Nairobi | en |