| dc.description.abstract | Financing viable business project is an issue that each and every financial manager poses to think
seriously about to enable them carry it out in a way that will enable the firm maximize its return.
This has therefore made them to battle with the choice of whether to finance their project fully
using debt financing, pure equity or a combination of both debt and equity, giving rise to the
question on the value of capital structure to a firm, especially the value of using debt finance in
the firm.
This paper therefore sought to find out the relationship between the earnings of the firm, the size
and the level of financial leverage of agricultural firms listed at the Nairobi Security Exchange
(NSE). The study focused on the agricultural firms listed at the Nairobi Security Exchange as a
representation of the firms within the agricultural sector in Kenya due to their huge capital
investment and their sizes. The study was based on secondary data which had been collected
from the NSE for a period of five years (2008 - 2012).
In fulfilling the objective, the researcher employed correlation and regression analysis to
determine the relationship between the size, earnings and the leverage of the agricultural firms
which confirmed a positive relationship between the leverage of the firm and its size, and a
negative relationship between the leverage level of these firms and their earnings. The findings
of the study will help the managers in determining how best they should finance their projects if
they want to achieve maximum profit. | en_US |
