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Abstract

The objective of this paper is to investigate the determinants of the capital structure on the basis of reviewed theories such as Static Trade-off Theory, Pecking order theory Information Asymmetry and Agency Theory, We examined different dependent variables of the capital structure such as debt ratio,short term debt ratio and long term debt ratio, and number of independent variables such as tax shield, assets structure, profitability, growth opportunities, liquidity, company size and dividend policy.On the basis of literature determinants under pecking-order theory are Liquidity, Firm size having negative relation with leverage, and profitability, asset tangibility having positive effect on the debt-to-capital ratio. Determinants of capital structure in static trade-off theory are; Non-debt tax shield in which having negative relation; and Profitability, Firm size, and Asset tangibility having positive effect on the debt-to-capital ratio. Assets tangibility, size and age having positive relation with debt-to-equity ratio on the basis of Information Asymmetry theory.Growth having negative relation with the debt-equity ratio as per agency theory.The famous theories on capital Structure are Pecking Order & Trade off theory. Finding of the study is that pecking theory in capital structure decision prevail, but some time moderate support for the trade-off theory as well as agency theory and Information Asymmetry theory.