Choge, Kiplimo Kevin2025-02-272025-02-272024-11https://ir-library.ku.ac.ke/handle/123456789/29674A Research Project Submitted to the School of Economics and Tourism in Partial Fulfilment for the Award of Degree of Master of Business Administration (Finance) of Kenyatta University, November 2024. Supervisor Francis Gitagia,The agricultural sector is crucial for the economic growth of Kenya. In 2022, the sector made up 33 percent of the GDP directly and an additional 27 percent indirectly via its interconnections with other sectors. The industry employs around 40% of the whole population and over 70% of Kenya's rural population. Nevertheless, agricultural companies registered on the NSE have seen a decrease in their company value, as shown by their market capitalization. The market capitalization of agricultural listed enterprises had a substantial reduction from 6161 points to 2789.64 points between 2018 and 2022, indicating a major decrease in company value. The general objective of the study was to evaluate the effect of financing structure on the firm value of agricultural firms listed in the NSE. The research specific objectives were; to assess the effect of short-term debt, long-term debt, equity, and retained earnings on the firm value of agricultural firms listed on the NSE. The research was based on the pecking order theory, Modigliani and Miller theory, and the shareholder value theory. The target demographic consisted of the seven manufacturing enterprises that listed in the NSE. A comprehensive survey was conducted on all the manufacturing companies listed in the NSE. The analysis used secondary data from financial reports as issued in the NSE handbook and KNBS for the time frame of 2018-2022. Various diagnostic tests including Multicollinearity, normality, Stationarity, heteroscedasticity, autocorrelation and test for random or fixed effect was carried out. Inferential analysis was conducted utilizing panel regression analysis and Pearson's product moment correlation analysis, whereas descriptive analysis included calculating means and standard deviations. The findings of the Feasible Generalized Least Square (FGLS) regression demonstrated that short term debt (p=0.044, <0.05), retained profits (p=0.034, <0.05), and equity financing (p=0.0000, <0.05) had a statistically significant and positive impact on business value. In contrast, it was shown that long-term debt had a statistically significant adverse impact (p=0.034, <0.05) on the firm value. Correlation analysis demonstrated that short term debt and equity financing had a weak positive correlation with firm value; long term debt had strong positive correlation with firm value whereas retained earnings had strong negative correlation with firm value. The study concludes that increasing short term debt, equity s and retained leads to higher firm value. Contrary, long term debt leads to reduced firm value. Consequently, the study recommends that, companies increase short term debt, retained earnings and equity financing in their financing structure. The firms should reduce long term debt in their financing structure to enhance firm value.enThesis