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Abstract
Every firm employs the use of capital to do its business. This capital employed may be consisting of equity (ownership contribution) and debt. Debt is any external funding which is repayable and has an associated cost. The cost may be direct such as interest payment or indirect such as agency cost. The relationship between capital structure and profitability based on stock performance has been a growing area of management research. A comprehensive review of literature reveals that capital structure decisions were often subject to a large number of studies. The problems of corporate financial structures have been an important factor in contributing to the Financial Crisis and leading many corporations to bankruptcy. Therefore, there is a need to develop a model to assess the impact of leverage on profitability based on market price of firms in Indian context. Therefore, the objective is to study the impact of capital structure on profitability based on market price of select manufacturing companies (Cement sector) in India.