Capital Structure Decision during Firm’s Life Cycle: with Reference of Top Companies Listed in Bse 500 Operating in India in Terms of the Market Capitalization
Balkrishna Maharjan1, Gangu Naidu Mandala2, Nitin Gupta3
1Balkrishna Maharjan, Mittal School of Business, Department of Management Studies, Lovely Professional University, Punjab.
2Gangu Naidu Mandala GITAM Institute of Management, GITAM Deemed to be University, Visakhapatnam.
3Nitin Gupta, Mittal School of Business, Department of Management Studies, Lovely Professional University, Punjab.
Manuscript received on November 20, 2019. | Revised Manuscript received on November 28, 2019. | Manuscript published on 30 November, 2019. | PP: 6685-6692 | Volume-8 Issue-4, November 2019. | Retrieval Number: D7473118419/2019©BEIESP | DOI: 10.35940/ijrte.D7473.118419
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Researchers have always made laudable contribution in examining the factors that influence an individuals and business firms to adopt and maintain the capital structure decision during a firm’s life cycle. The research methodology is carried out to examine the financing choices of top 100 firms in terms of the market capitalization through a close outlook with the business life cycle. The determinant of capital structure decision is based on profitability, liquidity, nature of industry, timing and timing of issue. Debt is taken as a fundamental source in an early stage where as in maturity stage, firm re-balance their capital structure gradually substituting debt for internal capital. This study aims to generate an idea of a dynamic evolution of the firm across the different stages, investment/disinvestment needs, profitability, cash flow generation and risk changes. Moreover, the study is carried out with a comprehensive analysis of the firm’s capital structure and the main elements in the classical theories, i.e. Trade off Theory and Pecking Order Theory.
Keywords: Capital Structure, Financial Growth Cycle, Financing Decision, Small And Medium-Sized Firms, Sources of Finance.
Scope of the Article: Industrial, Financial and Scientific Applications of All Kind.