A study of determinants of capital structure in Kenya : the case of companies quoted at Nairobi stock exchange NSE
Kangila, Isaac M.
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The population of this study entailed all 55 companies quoted at the Nairobi Stock Exchange between January 1995 to December 2005. Sampling will be done based on whether the company has been quoted at least for 8 consistent years; this will allow the study to capture the dynamics of capital structure. The study entailed use of secondary data from annual reports of the quoted companies. This data is available at the Nairobi Stock Exchange (NSE) records. The data collected will include proxies for debt/ leverage, tangibility, profitability, Business risk, growth, size and non-debt tax shield. The data collected was analysed using multiple regression analysis and correlation analysis. Comparison was also made and significance of each predictor variable determined. The test was done to determine whether the value of a predictor variable was significantly different from zero. T-statistics was computed using standard error that account for non-independence of the data collected using 95% confidence level. The report is organised in five chapters as follows: chapter one gives the introduction of the study by giving the background of the study, statement of the problem, objectives of the study and justification of the study. Chapter two deals with the literature review by outlining theories of capital structure and theoretical explanations of capital structure determinants. Research design is outlined in chapter three dealing with the population and sample for this study, data collection techniques and data analysis. Chapter four looks at research findings and chapter five deals with conclusions and recommendations.