ABSTRACT

The research study has been carried out to identify the relationship between firm’s characteristics and capital structure. The study has been made using panel data procedure for a sample of 334 listed firms on Pakistan stock exchange during 2004-2014. The study uses three dependent variables total debt ratio, short-term debt ratio and long-term debt ratio and eight independent variables; growth, tangibility, profitability, cost of debt, tax rate, liquidity, size, and debt service capacity. The results indicate that all the three models with dependent variables; total debt ratio, short-term debt ratio and long-term debt ratio and independent variables; growth, tangibility, profitability, cost of debt, tax rate, liquidity, size, and debt service capacity have significant relationship. Moreover, the nature of the nexus between the variables in all three models in consistent with the previous studies.