The Use of Debt in the Capital Structure of Companies

3071 Words Feb 2nd, 2018 12 Pages
Specifically the objectives of this research are to achieve the following:- To identify factors affecting a firm’s leverage by multiple regressions analysis of determinants of leverage full sample as well as sector by sector and index by index and comprise them. To analyze the relationship between firm characteristics variables and policy and decision variables with leverage of firm. To examine empirically the pecking order theory of capital structure, full sample as well as sector by sector and index by index and comprise them. To examine empirically the traditional trade-off theory by target adjustment model, full sample as well as sector by sector and index by index and comprise them. To suggest which theory of capital structure is explaining financing behavior of firms listed on National Stock Exchange of India (NSE) as well as firms in different sectors and different indexes.
Research gaps There is no comprehensive study on the financing behavior of the enlisted firms in NSE India. Some variables have been tested by some researchers; nevertheless, there has not been significant emphasis on variables such as “the effect of market-to-book equity ratio on leverage”. The methodology will incorporate both time series analysis and…
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