Capital management risk and value of the firm: Perspectives from private equity financial firms in Kenya

Artikel

Purpose: This study sought to explore the effect of capital management risk on value of the firm among private equity financial firms in Kenya. Design/methodology/approach: Anchored on the agency theory and guided by positivism research philosophy, descriptive research design as well as causal research design, the study surveyed 115 savings and credit societies regulated by Sacco Societies Regulatory Authority. A panel regression model detailing the interaction between capital risk management and firm's value was set. Findings: The study found that capital management risk significantly affects value of SACCOs in Kenya such that a unit change in capital adequacy ratio increases value of SACCO. Originality/value: The results of the study supported the propositions of agency theory which postulates that goal incongruence and asymmetric information may generate agency problems forcing the owners of the firm to incur agency costs which reduce the cash flows available for investment leading to sub-optimization and thus reducing the value of the firm. We recommend management of SACCOs in Kenya to seek to improve their capital adequacy ratio by increasing their tier one and tier two capital so as to increase their overall core capital.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: International Journal of Business and Economic Sciences Applied Research (IJBESAR) ; ISSN: 2408-0101 ; Volume: 12 ; Year: 2019 ; Issue: 1 ; Pages: 28-33 ; Kavala: Eastern Macedonia and Thrace Institute of Technology

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Corporate Finance and Governance: Other ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors ; Financial Institutions and Services: Other
• Thema: Capital Adequacy Ratio ; Capital management risk ; Firm value and SACCO

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kariuki, Florence Waitherero ; Muchina, Stephen ; Macharia, Stephen
• Ereignis: Veröffentlichung
• (wer): Eastern Macedonia and Thrace Institute of Technology
• (wo): Kavala
• (wann): 2019

Weitere Informationen

• DOI: doi:10.25103/ijbesar.121.03
• Handle: http://hdl.handle.net/10419/242200
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ