MUHAMMAD AZAM KHAN: Corporate finance is the area of finance dealing with the sources of funding and the capital structure
of corporations, the actions that take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources.
Since the publication of Durand's work (1952) and Modigliani and Miller (1958) that generated the debate about the companies' capital structures
, where many empirical studies have been dedicating in the verification of a great capital structure
The aim of this paper is to empirically investigate whether capital structure
choice influences firm profitability or not in listed non-financial firms of Pakistan.
We show that firms with high capital structure
tend to have a larger volatility for future earnings or cash flows.
refers to the mix of debt and equity used by a firm in financing its assets.
According to the modern literature of financial security, the agency conflicts are considered as determinant factor of the capital structure
of the companies.
The term Capital Structure
of a company refers to constitution of its capital employed (as shown on the liabilities side of its balance sheet), i.
The capital structure
of a business is the mix of types of debt and equity the company has on its balance sheet.
What has driven the recent growth, according to Cross, are two "macro factors: an aggressive search for yield by investors up and down the capital structure
(increasing supply), and a broadened acceptance of the product by both senior lenders and borrowers (increasing demand) .
The key to obtaining capital is layering each piece of the capital structure
together so that the completed capital stack can meet the owner's needs.
Extant capital structure
research examines either cross-sectional variation or time-series variation relating to changes in certain macroeconomic conditions, such as tax laws.
Dallas-based Capital Senior Living Corporation (CSL) is taking steps to simplify its capital structure
, capture 100 percent of the appreciation of its assets, continue its growth, and maximize value to shareholders through enhanced cash flow and higher net asset values.