Impact of Determinant for the Selection of Capital Structure of PSUs in India: A study

Abstract

Purpose of Research: Public Sector Undertakings (PSUs) have been playing a pivotal role in accelerating the pace of industrialization and achieving social and economic goals. The capital structure decision of the firm and the impact of determinants in capital structure decision is an important issue in the recent era for measuring the performance of any firm. Determinants of leverage can influence the selection of the capital structure of the business. Hence, in this study, we try to find out the relationship between the determinant of capital structure and leverage in the capital structure decision-making process of the PSUs in India. This study has been conducted to identify important factors along with the measurement of their level of significant capital structure theory. From the analysis, it is observed that most of the determinants follow the trade-off theory which means PSUs follow the trade-off theory of capital structure in the present situation in India.