Corporate finance managers worldwide have for a long time consistently sought to maximize shareholders' wealth and their firm's market value through their decisions on firm's capital structure. However, both scholars and practitioners of corporate finance are yet to agree on the optimal mix of equity and debt that maximizes a firm's financial performance. The purpose of this study was to examine the effects of equity financing options namely common stock (CS), retained earnings (REN) and total equity (TED) as ratios of total assets on the financial performance measured as return on assets (ROA) and return on equity (ROE) of Kenya's listed firms. Utilizing panel econometric techniques namely pooled ordinary least squares (OLS), fixed effects (FE) and random effects (RE), the study analyzes the effects of equity variables as ratios of total assets on the financial performance of 40 non-financial firms listed at the Nairobi Securities Exchange between 2009 and 2015. The study's empirical results show that CS ratio significantly and negatively affects ROA while REN ratio has a statistically significant and positive effect on ROA. Overall, TE ratio positively and significantly affects ROA. On the contrary, ROE is not significantly affected by the equity variables in the sample. While the non-significant effects of equity on ROE find support in Modigliani and Miller's capital structure irrelevance theory, the positive effects of REN ratio and the negative effects of CS ratio on ROA, which are largely supported by the trade-off theory, may explain the pecking order theory's prioritization of internal capital sources over debt and equity issuances. Thus, corporate finance managers should find a place for internal financing options particularly retained earnings to maximize equity holders' returns on assets employed. Additionally, corporate finance managers should endeavour to minimize on the use of CS due to its negative effects on shareholder earnings on their assets. Nonetheless, a reasonable balance between CS and REN should be considered since the positive effect between TE and ROA is an appraisal for an optimum mix of equity financing options.

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The International Financial Reporting Standard (IFRS) 9 presents the latest accounting treatment for financial assets and liabilities, impairment procedures, hedge and fair value accounting. This new regulation largely replaces the International Accounting Standards 39. The last form of IFRS 9 was published in July 2014 with the mandatory global compliance date for IFRS 9 set on January 1, 2018, with earlier application encouraged. The main distinctive features of this standard are described in terms of hedge accounting, recognition and classification, and fair value measurement of the financial instruments. The objective of the research study was to determine the impact of the mandatory adoption of IFRS 9 on the financial performance of commercial banks in Kenya. The study adopted an event study approach or design by analyzing the quarterly financial statements of the commercial banks submitted to the Central Bank of Kenya and comparing the performance of the commercial banks before the introduction of the IFRS 9 and after its adoption. The study’s findings were that returns on assets and returns on equity were on an upward trend despite the introduction of IFRS 9. This was contrary to the expectation of poor performance since lower earnings due to loan loss provisions were expected to have a material effect on profitability.