Corporate Taxation and Capital Structure. Effects of corporate Taxation on Capital Structure of Listed firms in Kenya

      Аннотация: Proper balance of debt and equity securities in a firm’s capital structure is a vital decision of any firm’s management. Over reliance of either source of finance negatively affects value of the firm. Listed Firms in Kenya show preference for debt to equity securities when raising external finance. Consequently on average listed firms in Kenya are highly geared as shown by the average leverage ratio of 1.288409. Over-reliance of debt securities may expose firms to the risk of financial distress whose materialization results to insolvency. Taxes both direct and implicit are known to affect the leverage decisions of firms. This book sheds light on the effect of corporate taxation on the capital structure of firms. Moreover, the speed of adjustment of listed firms towards a target leverage ratio is ascertained. Analysis in this book is critical to domestic and foreign investors, The Capital Market Authority (CMA) of Kenya, The Government of Kenya and other such stakeholders such as investment analysts

Ключевые слова: Capital Structure, financial distress, agency costs, Leverage, Corporate Tax, Pecking order hypothesis, Static trade off theory, Equity securities, Debt securities