Impact of Leverage on the Capital Structure Practices of Selected Telecommunication Companies

The main objective of this paper has been to analyze and understand the impact of leverage on the capital structure practices via profitability of selected telecommunication companies in India. This paper investigates the relationship between leverage and earning per share and it also describes how the earning capacity of the firm is influenced by fixed operating costs and fixed financial charges. This study has also described the relationship between debt equity ratio and earning per share and how effectively the firm uses debt financing. In this paper, selected telecommunication companies have been taken for analysis and one-way anova and t-test have been used to test the hypothesis. Skewness and Kurtosis have also been used to check “Lack of Symmetry “to understand the distribution of data and flatness or peakedness. The results of the study suggested that leverage and profitability and growth are related and leverage is having an impact on the capital structure practices of the firm.