Determinants of Capital Structure in Malaysian Companies

Abstract

In Malaysia, organization take a gander at the association between capital structure and market structure, particularly advantage. The current financial crisis has put awesome weight on residential and worldwide firms, particularly failing to meet firms’ expectations. The supply of credit has dropped drastically, while expanded hazard and an expanded cost of capital weight firms in finding the correct value of firm. Capital structure has been the subject of numerous surviving investigations, in which analysts intend to archive the connection between capital structure and firm performance. From a company's point of view, finding and working at the ideal capital structure could be useful. Capital structure essentially influences the cost and accessibility of capital, which thus will likewise influence a company's performance. For this study, 90 listed companies were chosen from five various industries for the period 2014 to 2017. This research has included six independent variables includes profitability, tangibility, firm size, growth, age and liquidity. The results indicate that profitability, tangibility and age are the key determinants of capital structure decision in Bursa Malaysia listed companies.