Factors Influencing Capital Composition: Review Of Literature

Abstract

Capital management plays a crucial role in shaping the overall financial well-being and growth of a firm. Determinants of capital structure can vary depending on various factors and circumstances. However, some common determinants include: cost of capital, business risk, profitability and growth opportunities, tax considerations, market conditions etc. It's important to note that these determinants are not exhaustive, and each company's capital structure decisions are unique based on its specific circumstances and strategic objectives. In this study factors have been scanned from two perspectives, the first is economy level and the second is sector level. Therefore, reviews of literatures are related to the study conducted on both the overall economy and specific sectors. By conducting this comprehensive literature review, we aim to identify common factors influencing capital structure that have emerged from previous research. This will contribute to a deeper understanding of the factors determining capital combination decisions. It, also, provides valuable understandings for all the parties in the field of finance.