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LEASING DECISIONS
The general objective of the study will be to analyse the factors that determine leasing decisions.financial leasing industry also play a very important role in developing financial markets and in providing finance to enterprises, especially small-scale-ones that faces problems of obtaining credit from banks.
Details
| language |  | english |
| wordcount |  | 17085 (cca 48 pages) |
| contextual quality |  | N/A |
| language level |  | N/A |
| price |  | free |
| sources |  | 41 |
Table of contents
CHAPTER ONE 1
1.1.1 Importance of Leasing 3
1.1.2 Lease Financing from a Global Perspective 5
1.1.3. Lease Financing 8
1.2 Statement of the problem 9
1.3 Objectives of the study 10
1.4 Research Questions 11
1.5. Hypotheses 11
1.5 Significance of the study 12
1.6 Scope and limitations of the study 13
CHAPTER TWO 13
LITERATURE REVIEW 14
2.2 Theoretical Literature 14
(a). Capital Structure Theory and Leasing 14
(b) Financial Contracting and Leasing. 15
(c ) Corporate finance theory and Leasing. 16
( d ). Leasing and Corporate Governance. 16
( e ). Treatment of leases in Kenya 17
2.3. General Literature on Leasing Decisions. 20
2.3.1 Firm specific Factors. 21
Tax Consideration (Effective Tax Rate) 21
Access to Capital at a Lower Cost. 22
Cash flow Conservation 23
Debt capacity 23
Agency Problem 24
Profitability and Growth. 24
Investment Opportunity Set. 25
Firm Size 26
Availability of Funds. 26
Increased (100%) Financing 26
Lower bankruptcy cost 27
Residual Risk 27
Risk Sharing Reasons 28
2.3.2Corporate Governance factors 29
Ownership Structure (Concentration) 29
2.3.3.Lease Specific Environmental Factors. 29
Leasing Legal Framework. 29
Regulation Framework. 31
Availability of Secondary Market. 32
Accounting Treatment 32
Pricing or Effective Cost of Lease Finance (Discount Factor or interest Rates) 33
2.4. Empirical Literature 34
2.5: Overview of Literature 39
2.6 CONCEPTUAL FRAMEWORK 40
CHAPTER THREE 42
RESEARCH METHODOLOGY 42
3.1 Research Design 42
3.2 Modeling Leasing Decision by Publicly Quoted Firms 42
3.3 The empirical model 46
3.4 Definition and Measurement of variables 48
3.5. Working Hypotheses 50
3.6. Target Population 54
3.7 Data collection Instruments 54
3.8Data Analysis 55
REFERENCES 56
Preview of the essay: LEASING DECISIONS
Financing decisions, investment decisions, dividend decisions and liquidity decisions are the centerpiece of financial management. Financing decisions remains the backbone of financial management. Key determinants of access to finance are access to capital and its costs . Decisions on financing are problems in sub-saharan Africa where access and cost of finance are among the top five-investment climate related problems (Ayyagari, Demirguc-kunt and Maksivomic, 2006)Batra et al (2000) identified high interest rates, lack of access to long term capital and collateral requirements as key constraints to access to finance in Africa. Summed together, lack of access to financial capital is one of the critical constraints of firms’ survival and development. One of most the viable methods of financing used in Kenya to overcome financial obstacles is leasing. Leasing ...
... decision to use lease financing. It is also used where the dependent variable is dichotomous and the dependent variable can be of any type. Further it assists in overcoming the limitations inherent in Ordinary Least Square regression. El Gazzar et al (1986) and Lasfer and Levis (1998) used Logit model to determine the extent of leasing . The study will adopt Lackerath-rovers ( 2006) who used the logit model to discriminate between leasing and no leasing, this is in line with Sharpe and Nguyen (1995) that firms that paid little or no dividend, generated little current cashflow and had low credit rating faced relatively high premium on external funds .
Essay is in categories
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Finance
/Corporate Finance
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