| Popis: |
In this paper we attempted to analyze as to how Indian firms went about in designing their capital structure during the period 2002 through 2011. The findings of the study revealed that designing the capital structure depended on profitability in general and on ROCE and RONW in particular. The hypotheses testing revealed that, on an aggregate basis, capital structure decisions of Indian firms were influenced by profitability, solvency, size, tax factor and growth opportunities. The analysis pertaining to the impact of individual factor on leverage decision revealed that there was no link between growth opportunities and the way the firms designed their capital structure. Though other factors impacted the leverage decision, ‘t’ values of beta coefficients indicated that the influence was not so high. Though the extent of reliance varied among the years, the findings reveal that capital structure decision of Indian firms depended mostly on profitability followed by short-term solvency, size and tax laws in India. The study goes into in-depth analysis of capital structure decisions by Indian firms and made its own contribution to the body of knowledge on the topic. |
