dc.contributor.author | Kiogora, Glory M | |
dc.date.accessioned | 2013-05-15T07:15:40Z | |
dc.date.available | 2013-05-15T07:15:40Z | |
dc.date.issued | 2000-06 | |
dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/22872 | |
dc.description.abstract | In 1958, when Modigliani and Miller came up with the irrelevancy theory of capital
structure a number of controversies sprang up, most of which sought to establish the
relationship between capital structure and the value of the firm or its cost of capital. The
answers given by the theorists aim at assisting investors to make proper investment
decisions.
This study aims at establishing the nature of capital structures employed by companies
quoted on the Nairobi Stock Exchange, specifically whether the capital structures differ
per industry category and whether the companies in the same sector have similar capital
structures, hence lending support to the existence of an optimal capital structure.
Discriminant analysis, regression analysis and variance analysis were the tests applied
with the use of the computer SPSS program.
Secondary data obtained from the Nairobi Stock Exchange was predominantly used for
the 51 companies for the period between 1991-1998. The relationship between returns
and capital structure of the companies forming the 20-share index was also investigated.
The results indicate that there are indeed differences in the capital structures among
industry groupings and that firms within a given sector tend to cluster towards some
target equity / total assets ratio lending support to the existence of optimal capital
structures as promulgated by the traditionalists. The results of the relationship between
capital structure and returns indicate that returns increase with increased leverage also
supporting the traditional view on capital structure.
Still a lot needs to be done in the area of capital structures of companies in Kenya,
specifically to establish the nature of capital structures of companies not quoted on the
Nairobi Stock Exchange and to use other ratios such as debt / equity in carrying out a
similar study. | en |
dc.description.sponsorship | University of Nairobi | en |
dc.language.iso | en | en |
dc.subject | Nairobi Stock Exchange (NSE) | en |
dc.subject | Capital structure | en |
dc.subject | Testing for variations | en |
dc.subject | Kenya | en |
dc.title | Testing for variations in the capital structure of companies quoted at the Nairobi Stock Exchange:An empirical study | en |
dc.type | Thesis | en |
local.publisher | School of Business, University of Nairobi | en |