Determinants Of Capital Structure In Financial Management

Determinants of capital structure of a firm.

Determinants of capital structure in financial management. The proportion of the cost of raw materials to total cost 5. Abstract this paper develops a study on identifying the most significant determinants of capital structure of 15 firms listed on the s p 500 index new york stock exchange using panel data over 5 years period from 2010 to 2014. Use of manual labour or mechanisation 6. Financial leverage or trading on equity.

Hence capital structure is one of the effective tools of management to manage the cost of capital. According to gerstenberg capital structure or financial structure of a company is the make up or form or composition of capitalisation i e the type of securities to be issued and the relative proportion of each type of securities in the total capitalisation. Determinants of capital structure. It is therefore recommended that banks should adopt a mixed source of financing and choose appropriate ownership structure and management policy.

Some of the most determinants of working capital are. We may now briefly discuss the key factors governing a firm s capital structure decisions. The paper contributes to the capital structure literature by investigating the determinants of capital structure of firms operating in the asia pacific region in four countries with different legal financial and institutional environments namely thailand malaysia singapore and australia. Nature of business 2.

The use of long term fixed interest bearing debt and preference share capital along with equity share capital is called financial leverage or trading on equity. Capital structure is how a company funds its overall operations and growth. Rajni sofat sukhdev singh determinants of capital structure. The factors influencing the capital structure or determinants of capital structure are discussed as follows.

An empirical study of manufacturing firms in india international journal of law and management 10 1108 ijlma 05 2016 0051 59 6 1029 1045 2017. Meaning of capital structure. Determinants of capital structure. Volume of business 4.

Financial manager is to ensure low cost of capital and thus maximize the wealth of shareholders. Determinants of capital structure an empirical evidence us by ra the university of lahore pakistan. Debt consists of borrowed money that is due back to the lender commonly with interest expense. Length of period of manufacture 3.

Suggested citation salawu rafiu oyesola the determinants of the capital structure of financial firms in nigeria.