Title: Determinants of capital structure: An empirical study of Cement industry of Pakistan
Abstract: Capital structure is the mixture of debt financing and equity financing. Its choice and determinants related to many different factors. This paper endeavors to answer the very questions of what determines the capital structure of Pakistani listed cement companies. This paper presents several traditional theories discussed on capital structure, such as trade-off theory, agency cost theory and theory of pecking-order. The data of 20 companies for three financial years 2007, 2008, 2009 is taken. The study shows that except size, all other variables have significant relationship with leverage and can be used for making decisions by companies in cement industry. The correlation analysis is used to measure the effects of different variables on the leverage & so finding out the determinants of the capital structure in cement industry.The study helps the management in decision making while setting their leverage ratio, as they will be able to know that up to what extent profitability, growth & tangibility will be affected by decrease or increase in leverage.
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: article
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Cited By Count: 8
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