Abstract
This study is aimed at determining the capital structure of listed energy sector companies in Pakistan, with a
view to finding out the impact of four variables, i.e. tangibility, size, growth and profitability of the firms on their
leverage. The sample included data for 20 companies for the period spanning 2004 to 2008. Our results show
that all these factors affect the leverage of a firm in some degree. We found that tangibility and size have
positive association with leverage which supports the predictions of Static Tradeoff Theory. On the other hand,
profitability was found to have negative relationship with a firm‟s level of debt, a finding that supports the
viewpoint presented by Pecking Order Theory. Growth had positive relationship with leverage thus supporting
the simple version of Pecking Order Theory.
Kashif Ghani, Syed Husnain Bukhari. (2010) Determinants of Capital Structure: A Case of Listed Energy Sector Companies in Pakistan, Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-08, Issue-2.
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