Capital Structure and Financing Decision: Industry-Base Debt-Equity Ratio in Bangladesh

Abstract

This study covers the significance of capital structure for the organization which differs on the basis of the industry. The reasons behind the various debt-equity ratios for different industry are also discussed in this study. This study also mainly focused on the use of debt and equity for financing the various types of industry in Bangladesh. It is important to evaluate any particular industry of any country by considering their financing decision which has an impact on capital structure. Bangladesh is a developing country and has an opportunity to attract the foreign investors and also the domestic investors to invest in the country. For this reason, it is essential to assess the capital structure before investing in the industry of this country.

Keywords: Capital Structure, Financial Distress Cost, Weighted Average Cost of Capital, Debt-Equity Ratio, Tax Benefit.