Determinants of Capital Structure: An Empirical Analysis of Fuel and Energy Sector of Pakistan

This study was conducted to identify the factors that influence debt ratio in financing. In this study, we have targeted the firms of fuel and energy sector listed in Pakistan to analyze our results. The analysis is conducted for the period 2010 to 2015. After applying regression analysis, our results stated that profitability, size, tangibility have the positive association with leverage in this sector while tax rate results observed the negative relationship with advantage since the tax rate increases the debt financing declines. The overall results of this study supported trade-off theory of capital structure in fuel and energy sector of Pakistan.