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The Role Of Business Risk And Non Debt Tax Shields On Capital Structure: A Study Based On Cement Sector In Pakistan

Author

Listed:
  • Muhammad Asif Joyo

    (M.phil Scholar at Institute of Business Management-IoBM)

  • Nawaz Ahmad

    (Assistant Professor at Institute of Business Management-IoBM)

  • Ghulam Mustafa Shaikh

    (Research Associate at Ilma University)

Abstract

Objective The objective of this study is to determine the influence of Business risk and Non Tax shield on Capital structure.Methodology This study is based on panel data of20 companies from the cement sector of Pakistan.Panel regression is applied for statistical analysis.Conclusion This study concludes that business risk and nontax shield has insignificant effect on capital structure debt to equity ratio, whereas the interest coverage has positive effect on debt to equity ratio.Policy Implication As per this study the volatility and business risk involved in the cement sector may have some serious issues if the exports is continuously decline and at same time raising leverage funds may hurt the performance of company

Suggested Citation

  • Muhammad Asif Joyo & Nawaz Ahmad & Ghulam Mustafa Shaikh, 2017. "The Role Of Business Risk And Non Debt Tax Shields On Capital Structure: A Study Based On Cement Sector In Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 13(2), pages 36-49.
    • Handle: RePEc:aib:ibtjbs:v:13:y:2017:i:2:p:36-49
    DOI: https://doi.org/10.46745/ilma.ibtjbs.2017.132.4
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    References listed on IDEAS

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