Capital Structure and Market Capitalization of Manufacturing and Allied Companies Quoted at The Nairobi Securities Exchange, Kenya.

The price of a share ought to fairly represent all of the company's information in an efficient market so that investors may make sound choices about their investments. Developed nations are believed to have more efficient capital markets than those in transition because of data symmetry. The market forces of supply and demand govern the price of a share and, by extension, fluctuations in the company's market value. The manufacturing and allied businesses quoted on the Nairobi Securities Exchange have seen a decline in share values during the course of the investigation. The financial structure of a business, which can consist of both debt and equity, has a big effect on share price. The management of every company ought to consequently endeavor to possess the ideal capital structure for the highest potential returns. Examining the effects of capital structure on the market capitalization of manufacturing and related companies listed on the Nairobi Securities Exchange was the primary objective of this study. The efficient market hypothesis, agency cost-based theory, static trade-off theory, Modighiliani and Miller theorem, and pecking order theory were among the theories that provided support for the research variables. The eight manufacturing and allied businesses listed on the Nairobi Securities Exchange were the demographic group of interest; they were picked because of their significant economic impact on Kenya. Over an five-year period (2018 to 2022), the researcher analyzed market capitalization and capital structure using secondary data from annual reports and Nairobi Securities Exchange statistics. The panel regression model was used to analyze the data. Listed manufacturing companies on the Nairobi Securities Exchange market capitalizations had a positive significant relationship with their equity and debt, according to the study. The study’s results also indicate that manufacturing and allied companies listed on the Nairobi Securities Exchange had substantial equity and retained earnings. The debt of manufacturing and allied companies listed on Nairobi Securities Exchange turned out as better. Therefore, the companies were found to have a greater creditworthiness though they could be subjected to risk associated with a company carrying too little debt. The survey suggests that in order to strengthen their financial position, the corporations monitor their expenditures and create a sensible monthly budget.