Determinants of Cost of Capital: Kenyan context

George Onyiego Kengere, Manasseh Mwai Njagi, Charles Kamau and Luvuno Chonga

No ym896, AfricArxiv from Center for Open Science

Abstract: The purpose of this paper was to look at the determinants of the cost of capital for a firm. The study conducted a literature review with the goal of identifying the factors that influence the cost of capital for a firm. The research showed that profitability, liquidity, tax, growth, size, and age of the company are among the major determinants that influence the cost of capital for a firm. Further the research showed a positive correlation between the cost of capital and profitability, liquidity, growth, size, and age of the company. The capital arrangement of a firm is determined on account of the pecking order theory and trade-off theory while bearing in mind the cost elements associated with it. In Kenya, economic stability and political stability are the primary determinants that determine the cost of capital for a firm. This determining factor influences the availability and cost of credit offered by financial institutions in Kenya.

Date: 2023-03-21
New Economics Papers: this item is included in nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://osf.io/download/641b350e28e5c515b3937531/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osf:africa:ym896

DOI: 10.31219/osf.io/ym896

Access Statistics for this paper

More papers in AfricArxiv from Center for Open Science
Bibliographic data for series maintained by OSF ().