Journal of Commerce and Accounting Research

2014 | Volume 3 | Issue 1

Capital Structure Decision - Theoretical Underpinnings and Empirical Evidences

1. Inderjit Kaur – Research Fellow, Finance Department, National Institute Of Financial Management, Faridabad, India

Received
24-Feb-2014 		Accepted
- 		Published
24-Feb-2014
Abstract
The objective of the paper is to survey the theories on the capital structure with objective to ascertain whether the capital structure decision is relevant for a firm. The theoretical underpinnings have been surveyed from the theory of irrelevance by Modigliani and Miller to recent theories like Pecking order and Market Timing theory of capital structure. The theoretical underpinnings have been substantiated with empirical evidences from developed and developing economies.
Keywords Capital Structure, Value of Firm, Theory of Irrelevance, Pecking Order
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