Abstract

Hundreds of studies researching impact of capital structure on financial performance have been carried across the globe. A selected review of some of the latest ones reveal that most of them have been premised on a thin sample size. Ten such recent studies have minimum sample size of 10 organizations, minimum sample size of 237 organizations and a mean sample size of 56 organizations. The sample size choice has been largely ad-hoc not showing any relationship with the size of population. This research takes a scientific approach to study 400 multinational companies from India based on the population of around 5000 listed companies on the Bombay Stock Exchange. Due sectoral representation was given in the sample selected for the study. Here in this study the impact of capital structure on financial output of the selected companies was studied. Before the full-fledged study was carried, a pilot study was carried on the basis of 30 multinational companies. This article presents the conceptual foundations, literature review and findings from the pilot study.

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