Published Paper Details:

The combining of equity and debt funding by a corporation to finance its assets, overall operation, and expansion is referred to as capital structure. There are no uniform guidelines for the optimal debt-equity mix that have been carefully addressed in the academic literature to the suitable capital structure mix. Previous research on ownership and capital structure, including as agency theory, pecking order theory, and trade-off theory, identified these concerns. The trade-off theory explains the hypothesis of capital structure, which is the possibility that an organisation will choose how much debt fund and how much equity fund to utilise by adjusting the costs and benefits. The funding comes from three sources: reserves or retained earnings, long-term borrowing, and new equity. The strong foundation was developed by the Modigliani and Miller, due to which numerous theoretical frameworks were developed and these frameworks give boost to future theoretical research about capital structure. The profit maximization activism is concerned about responsible decisions in all things. In this way, managers or directors may decide firm's capital structure to seek after their own particular advantages rather than those of investors or debt holders.