Capital Structure and Its Determinants: A Case of Cement Sector in Pakistan

Abstract

The underlying study is regarding the capital structuring of the cement sector companies listed in KSE (Karachi Stock Exchange). The study analyzed 10 out of 20 firms in the cement sector for a data period of 2006-2011 by using panel data. A total of 4 explanatory variables i.e. profitability, tangibility, firm size and growth were used as explanatory variables of the study and to know their relation with leverage. The study results shows that profitability have a significant and negative relationship with the leverage with supports the assumptions of Pecking Order Theory (POT) theory.