“Measuring The Capital Structure, Profitability And Eva: With Reference To Selected Aviation Firms In India”

Abstract

Capital “structure decision is the vital one since the profitability of an enterprise is directly affected by such decision. The successful selection and use of capital is one of the key elements of the firms’ financial strategy. Hence, proper care and attention need to be given while determining capital structure decision. The purpose of this study is to investigate the relationship between capital structure and profitability of Company and to measure its impact on EVA. Design/methodology/approach: Different conditional theories of capital structure are reviewed (the trade‐off theory, pecking order theory, agency theory, and theory of free cash flow) in order to formulate testable propositions concerning the determinants of capital structure of select Indian Aviation firms.