| dc.description.abstract | The study sought to determine the impact of taxes on financing decisions and firm value
for companies quoted at the NSE. The study was guided by the research objective which
was to establish the impact of taxation (both corporate and individual) on corporate
financing decisions and firm value for firms quoted at the NSE. The study entailed use of
secondary data obtained from the NSE and a causal research design. The data collected
was analyzed using linear regression and correlation analysis to test the relationship
among the variables.
The study found out that the relationship between dividend and value is positive
conveying the message that future dividends have an impact on the value of a firm. The
study did not provide any negative results between tax and dividends. This implies that
taxes play no role in making decisions regarding the financing of a firm. The conclusion
that can be drawn from the study is that there is no tax advantage in the pricing of
dividends in Kenya.
The relationships between values and debt were mixed although leaning towards the
negative. Where the relationship was positive, it was insignificant. This observation is
. consistent with the Miller (1977) hypothesis that debt has no positive tax benefits. The
tax effects on the financing decisions of a firm are therefore negligible. In overall, it is
known that high levels of debt are not good for the value of a firm. This is because, at
high levels of leverage, agency. problems arise between the stockholders and the debt
holders as debt is risky creating negative influence on the value of the firm. | en_US |
