Browsing by Author "Gebrehiwot Gebremedihn"

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    The Determinants of Capital Structure Evidence from Manufacturing Share Companies of Addis Ababa City.
    (A.A.U, 2011-06) Mekonnen Amanuel; Gebrehiwot Gebremedihn
    Capital structure decisions are among the most important and crucial decisions for any business because of their effect on the value and cost of the company. In this paper, an attempt has been made to examine the relevance of theoretical internal (firm level)factors determine capital structure of manufacturing share companies in Addis Ababa, Ethiopia. To seek answers to these questions, seven explanatory variables; tangibility,non-tax shields, growth, earning volatility, profitability, age and size of the firm were regressed against the dependent variables of total debt ratio, short term ratio and long term debt ratio. In connection of this, a sample of 12 companies were take and secondary data was collected from audited financial statements of selected companies for the period of five years (J 996-2002EC). Stratified sampling design was employed and companies were selected based on simple random to represent different industry sectors (strata) within manufacturing share companies. Data was then analyzed on quantitative basis using multivariate OLS regression. The results show that tangibility, non debt tax shields, earning volatility, profitability, and Size of the firm variables are the significant determinants of capital structure of Addis Ababa manufacturing share companies at least one out of the three models for capital Structure employed in the study. While no clear and statistical proved relation are obtained For the variables growth of the firm and age of the firm in any of the capital structure Models.
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    The Determinants of Capital Structure Evidence from Manufacturing Share Companies of Addis Ababa City.
    (Addis Ababa University, 2011-06) Mekonnen Amanuel; Gebrehiwot Gebremedihn
    Capital structure decisions are among the most important and crucial decisions for any business because of their effect on the value and cost of the company. In this paper, an attempt has been made to examine the relevance of theoretical internal (firm level) factors determine capital structure of manufacturing share companies in Addis Ababa, Ethiopia. To seek answers to these questions, seven explanatory variables; tangibility, non-tax shields, growth, earning volatility, profitability, age and size of the firm were regressed against the dependent variables of total debt ratio, short term ratio and long term debt ratio. In connection of this, a sample of 12 companies were take and secondary data was collected from audited financial statements of selected companies for the period of five years (1996- 2002EC). Stratified sampling design was employed and companies were selected based on simple random to represent different industry sectors (strata) within manufacturing share companies. Data was then analyzed on quantitative basis using multivariate OLS regression. The results show that tangibility, non debt tax shields, earning volatility, profitability, and size of the firm variables are the significant determinants of capital structure of Addis Ababa manufacturing share companies at least one out of the three models for capital structure employed in the study. While no clear and statistical proved relation are obtained for the variables growth of the firm and age of the firm in any of the capital structure models
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    The Determinants of Capital Structure in Ethiopian Small Scale Manufacturing Co- Operatives
    (Addis Ababa University, 2011-09) Kebede Daniel; Gebrehiwot Gebremedihn
    The purpose of the study is investigating the determinants of capital structure for Small Scale Manufacturing Co-operatives (SSMCs) in Ethiopia. Hypotheses utilizing trade-off, pecking order and agency theories are empirically examined using a series of firm characteristics: size, tangibility, profitability, earning volatility, growth and age. A structured record review was made to collect a panel data, which include 13 SSMCs year observations of five years over the period 1998 – 2002 E.C. The findings suggest that size, age, tangibility, and growth variables are the most important determinants of capital structure of SSMCs in Ethiopia. The findings also reveal that the dominant capital structure theories (trade-off, pecking order, and agency theories) appear indeed to be valid for Ethiopian SSMCs’ capital structure; in fact, trade-off theory best explains Ethiopian SSMCs’ capital structure. All firm specific variables except earnings volatility variable seem to have an effect on the level of leverage in Ethiopian SSMCs. Key words: Capital structure; Small Scale Manufacturing Co-operatives
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    Determinants of Dividend Payout: An Empirical Study on Bank Industry in Ethiopia
    (Addis Ababa University, 2011-06) Kinfe Theodros; Gebrehiwot Gebremedihn
    This paper aimed at investigating the factors determining dividend payout policy in Ethiopia bank industry. This study used a panel dataset of audited financial statement of banks between the years of 2006 and 2010. Seven hypotheses were investigated using OLS regression techniques. The models considered the impact of profitability, liquidity, leverage, firm size, growth, and lagged dividend per share on dividend payout ratios. Empirical results verified that the main characteristics of firm dividend payout policy were that dividend payments related strongly and directly to firm size and lagged dividend per share, but negatively to the liquidity ratio. However, there is no relationship of profitability, leverage, and growth as independent variables with dividend payout. The statistically significant variables may indicate that firms pay dividends with the intention of reducing the agency problem. Mangers are reluctant to cut dividend. And, negative relation of liquidity with dividend may indicate inefficient of bank industry. The results of this study have delivered some insights on the determinant factors of dividend in Ethiopia.Keywords: dividend policy, irrelevant theorem, bird-in-hand theory, tax preference theory, agency conflict and signaling mechanism
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    Determinants of Dividend Payout: An Empirical Study on Bank Industry in Ethiopia
    (A.A.U, 2011-06) Kinfe Theodros; Gebrehiwot Gebremedihn
    This paper aimed at investigating the factors determining dividend payout policy in Ethiopia bank industry. This study used a panel dataset of audited financial statement of banks between the years of 2006 and 20 I O. Seven hypotheses were investigated using OLS regression techniques. The models considered the impact of profitability, liquidity,leverage, firm size, growth, and lagged dividend per share on dividend payout ratios.Empirical results verified that the main characteristics of firm dividend payout policy were that dividend payments related strongly and directly to firm size and lagged dividend per share, but negatively to the liquidity ratio. However, there is no relationship of profitability, leverage, and growth as independent variables with dividend payout. The statist ically significant variables may indicate that firms pay dividends with the intention of reducing the agency problem. Mangers are reluctant to cut dividend. And, negative relation of liquidity with dividend may indicate inefficient of bank industry. The results of this study have delivered some insights on the determinant factors of dividend in Ethiopia.