DETERMINANTS OF CAPITAL STRUCTURE IN CEMENT SECTOR OF PAKISTAN STOCK EXCHANGE

Abstract

Purpose The aim of this research is to observe the determinants of capital structure in the non- financial sector (cement sector), which are listed in the Pakistan Stock Exchange. The research is basically to discover the impacts of the determinants on capital structure. Methodology & Design The research emphases on 16 companies out of 21 for the period of 5 years (2013-2017), which belong to the Cement sector of Pakistan. The data is collected from the company’s financial statements in a direction to determine the capital structure. The research is Quantitative nature and the data is gathered mainly from the secondary sources. Findings The research findings showed that Asset Tangibility and liquidity have a negative statistical significant impact on leverage whereas the profitability, firm growth and size have a statistical insignificant impact on firm’s capital structure. Recommendations The outcomes of this research help to improve the capital structure determinant’s knowledge and also helps Company to take effective decisions related to capital structure. Moreover, this research helps in a better understanding of financial decision maker and also consider it into a better way to manage the cement company’s capital structure.