Browsing by Author "Mauti, Dennis"

Filter results by typing the first few letters
Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Effect of Corporate Risk Hedging Practices on Firm Value of Listed Commercial and Service Firms in Kenya
    (KCA University, 2019) Mauti, Dennis
    Thisstudyaimedtoexaminetheeffectoffinancialriskhedgingpracticesonfirm valueoflistedcommercialandservicefirmsinKenya.Thisstudywasguidedbythe followingfourobjectives:Toexaminetheeffectofliquidityriskhedgingonfirm’svalue oflistedcommercialandservicefirmsinKenya,toassesstheeffectofcreditrisk hedgingonfirmsvalueoffirm’svalueoflistedcommercialandservicefirmsinKenya, todeterminetheeffectofoperationalriskhedgingonfirm’svalueoflistedcommercial andservicefirmsinKenya,todeterminetheeffectofforexriskhedgingonfirm’svalue oflistedcommercialandservicefirmsinKenya.Thestudyemployeddescriptive research design using paneldata analysis.The targetpopulation ofthe study encompassed10listedcommercialandservicefirmsinKenya.Allthe10listed commercialandservicefirmsinKenyaformedthesamplesizeasthestudywasa censusoflistedbanksinKenya.Secondarydatawasextractedfrompublishedannual reportsofindividuallistedcommercialandservicefirms.Thedestructeddatawas recordedondatacollectionsheets.Bothdescriptiveandinferentialstatisticswere used.Descriptiveanalysissuchasmean,frequenciesandstandarddeviationwere used.Forinferentialanalysis,correlationanalysiswasadoptedtotesttheassociation betweenriskhedgingpracticesandfirm valueoflistedcommercialandservicefirms inKenya.SimpleOLSmodelwasusedtoestablishthecausaleffectrelationship.The findings were presented using tables with associated explanations.The study establishedthatcreditriskhedging,liquidityriskhedgingandoperationalriskhedging hadstatisticallysignificanteffectonfirm’svalueoflistedcommercialandservice iv firmsinKenya.However,theeffectforeignexchangeriskhedgingwasnotstatistically significant.Thestudyconcludesthatcorporateriskhedginghasasignificanteffecton firm’svalueoflistedcommercialandservicefirmsinKenya.Thestudyrecommends tomanagementoflistedcommercialandservicefirmsinKenyatoimproveontheir hedgingactivitiestowardscreditrisk.Specifically,thestudyrecommendsthatthe firmsshouldsetasideenoughprovisionsforbadanddoubtfuldebtstocoverforany eventualbaddebts,whichmayhavetobewrittenoff.Secondly,thecurrentstudy wishestorecommendtothetopmanagementoflistedcommercialandservicefirms toensurethefirmsareliquidenoughsuchthattheydonotrunintofinancialdistressa situationwheretheyarenotabletosettleshort-term obligationsastheyfalldue. Finally,thecurrentstudywishestorecommendtothetopmanagementoflisted commercialandservicefirmstocontrolforexriskhowever,sincetheeffectofforex riskhedgingwasnotsignificantespeciallyforfirmswithminimalcurrencyexposers. Keywords:Financialriskhedging,firmValue,forexriskhedging,creditriskhedging andliquidityriskhedging.