Determinants of Capital Structure: A Literature Review

Capital structure decisions are significant financial decisions of the corporate firms as they influence the return as well as the risk of equity shareholders. A vast volume of work has empirically investigated the capital structure decisions in India and abroad. In recent years, the subject of corporate financial practices has also attracted much attention in the view of new challenges of corporate restructuring thrown up by the new economic and business environment, with the paradigm shift in monetary policy, overwhelming growth of information and computer technology, development of new tools of performance analysis like EVA and so on. The aim of this chapter is to review the existing empirical studies on issues of financial management decisions so as to find their answers.