International Journal of Management, IT & Engineering
Vol. 7 Issue 8, August 2017,
ISSN: 2249-0558 Impact Factor: 7.119
Journal Homepage: http://www.ijmra.us , Email: editorijmie@gmail.com
Double-Blind Peer Reviewed Refereed Open Access International Journal - Included in the International Serial
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190
International journal of Management, IT and Engineering
http://www.ijmra.us , Email: editorijmie@gmail.com
Determinants of Leverage: A Study on S&P BSE
TECK
Nirmala J
*
Prof. D. Anand
**
Abstract
Every company irrespective of the size strives
hard to have optimal capital structure. Capital Structure is
a mix of debt and equity capital of the firm. It is also
called as financial structure of a firm. It is very important
as it related to the ability of the firm cater to the needs of
its stakeholders, besides expansion, diversification and
modernization. The present study has the objective of
identifying determinants of capital structure, to test for
the applicability of trade-off theory, the sketch that a
company make choice in percentage of debt finance and
equity finance to use by balancing the costs and benefits,
the trade-off between the tax shield of debt and cost
financial distress. The study is based on the sample data
drawn from the Indian Information Technology sector
firms which are listed in BSE for the five year period
2010-11 to 2015-16. Top 10 companies are considered
according to the market capitalization. The study examine
the factors influencing capital structure of S&P BSE
TECK, i.e., companies related to media, information
Technology, and Telecommunication firms which are
listed in BSE. For this study the various determinants that
affect the capital structure of the above stated sector is
considered. The various determinants are, leverage as a
Keywords:
Leverage,
Information technology,
Trade- off theory,
Hausman test,
Wald test,
.
*
Assistant professor, Department of Management Studies, Vijayanagara Sri
Krishnadevaraya University, Bellary
**
Professor, Department of Business Administration, University of Mysore