Capital Structure Formation And Investment Performance Of The General Insurance Companies In Kenya

ABSTRACT Financial management models have impact on wealth maximization. Wealth is maximized when a positive net present value is earned on investments. The use of debt and equity forms the capital structure of a company. Recent empirical studies have focused on how debt or equity affects financial performance. There has not been adequate analysis of the combined effect of debt and equity in the same model on investment performance. Moreover, these studies have not provided conclusive results on the optimality level of debt and equity. This study examined the debt and equity capital effect on…