capital structure

Capital Structure
Financial Seminar
DFI 605

Group Members
Nidhi Batta

D61/79041/2012

Caleb Musau Kivuva

D61/79601/2012

Tom Mbuya Odundo

D61/78251/2012

CathrineWanjiku Kamau

D61/60682/2013

Daniel Mwangi Mwaniki

D61/84153/2012

Ndiangui James Wambugu

D61/79627/2012

Submitted to: Mr. Mirie Mwangi
September - December 2013

Submitted in partial fulfilment of the requirements of the
Masters in Business Administration degree at the University of Nairobi.

TABLE OF CONTENTS
TABLE OF CONTENTS...................................................................................................................................... II
LIST OF ABBREVIATIONS ........................................................................................................................III
1. INTRODUCTION ...................................................................................................................................... 1
1.1 BACKGROUND................................................................................................................................................... 1
1.2 THEORY REVIEW OF CAPITAL STRUCTURE ............................................................................................................... 2
1.2.1 Modigliani-Miller Theory....................................................................................................................... 2
1.2.2 Trade-Off Theory ................................................................................................................................... 3
1.2.3 Pecking-Order Theory............................................................................................................................ 3
1.2.4 Signalling Theory ................................................................................................................................... 4
1.2.5 Market Timing Theory

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