This study aims to determine the influence of various firm level characteristics such as, profitability, size, growth opportunities, asset tangibility, non-debt tax shield, volatility and liquidity on capital structure. Employing the cross-sectional data methodology, the researcher examines the capital structure determinants of 202 companies from FTSE 250 for the time period of 2002 -2009. Seven variables multiple regression models are used to estimate the influence of firm level attributes on capital structure and capital structure is measured simultaneously by the ratios of total debt, long-term debt and short-term debt at both book value and market value of equity. The results obtained from four different regression models show that profitability and liquidity are negatively and significantly related to leverage. Also asset tangibility has a positive relationship with leverage, which is significant. Moreover the researcher finds that total debt ratio at market value of equity is the most important dependent variable as a proxy of capital structure, followed by long-term debt ratio at market value of equity.
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DECLARATION
I declare that this dissertation is all my own work and the sources of information and material I have used (including the Internet) have been fully identified and properly acknowledged as required. I have kept all materials used in this research, including samples, research data, preliminary analysis, notes and drafts, and I can produce them on request.3 Acknowledgement I would like to show my gratitude to everybody who has helped me throughout the research period.