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A Critical Review of Capital Structure Theories

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  • Syed Muhammad Javed
  • Agha Jahanzeb
  • Saif-ur-Rehman

Abstract

The purpose of this paper is to scrutinize and appreciate the theories of capital structure starting from theory of Miller and Modigliani (1958) of capital structure, which is also known as irrelevance theory of capital structure and also including theory like pecking order theory, trade off theory, market timing theory and agency cost theory. In addition, authors have tried to explain the theories and their contradiction with each other in detail. This paper will be an addition to understand the theories of capital structure.

Suggested Citation

  • Syed Muhammad Javed & Agha Jahanzeb & Saif-ur-Rehman, 2012. "A Critical Review of Capital Structure Theories," Information Management and Business Review, AMH International, vol. 4(11), pages 553-557.
    • Handle: RePEc:rnd:arimbr:v:4:y:2012:i:11:p:553-557
    DOI: 10.22610/imbr.v4i11.1012
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    References listed on IDEAS

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    3. Suresh Ramakrishnan & Saqib Muneer & Melati Ahmad Anuar, 2015. "An Interaction between Firm Strategy, Capital Structure and Firm’s Performance," Journal of Economics and Behavioral Studies, AMH International, vol. 7(4), pages 37-47.
    4. Olabanji Oni, 2017. "Determinants of Venture Capital Supply in Sub-Saharan Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 9(4), pages 87-97.
    5. Mafumbate J & Ndlovu U & Mafuka A & Gavhure P, 2017. "The Influence of Firm Specific Determinants on Financial Performance in the Power Industry," Journal of Economics and Behavioral Studies, AMH International, vol. 9(5), pages 18-28.

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