The Impact f Macroeconomic Factors in Capital Structure of Listed Non

Abstract

vi ABSTRACT The primary goal of this study was to evaluate the macroeconomic variables affecting capital structure of non-financial companies listed on Tanzania's DSE. With this overarching goal in mind, the study specifically looked at the effects of GDP, inflation rate, and interest rate on the capital structure of non-financial firms listed on the DSE as well as the relationship between these three factors and capital structure. The population of the study consisted of non-financial firms in Tanzania, but the target population was non-financial firms listed on the DSE for the purpose of the study relating to macroeconomic factors for the period of 7 years between 2015 and 2021. The study used a cross-sectional design supported by a quantitative approach. Secondary data from the verified and publicly available financial statements of the selected companies were gathered for this study on both independent and dependent variables. Regression mode with panel data and descriptive statistics have both been applied. The study found that the leverage ratio, which measures capital structure, has a negative link with GDP growth rate. The study found a favorable correlation between the capital structure of non- financial companies listed on the DSE and the rate of inflation. Nonetheless, the study did discover a negative correlation between interest rates and the capital structure of non-financial companies listed on the DSE. It is recommended that policy makers and the government incentivize more enterprises to register on the Dar es Salaam stock exchange so they can take use of the different financing options available. There are relatively few companies listed on the Dar es Salaam stock exchange. In order to reduce agency conflict in the eyes of the firms and promote additional prospects for investment growth, the government ought to purchase more shares in DSE listed companies through social security institutions or other channels