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Asian Journal of Management
Year : 2015, Volume : 6, Issue : 2
First page : ( 101) Last page : ( 109)
Print ISSN : 0976-495X. Online ISSN : 2321-5763.
Article DOI : 10.5958/2321-5763.2015.00015.3

Capital Structure Strategies and Its Effect on Sustainable Corporate Growth -A Study on Dr. Reddy's Laboratories

Dr. Rao K.S. Sekhara1,*, Dr. Madhav V. Venu2,**

1Assistant Professor, KLU Business School, KL University, Andhra Pradesh, India

2Associate Professor, KLU Business School, KL University, Andhra Pradesh, India

*Corresponding Author E-mail: sekharks1@gmail.com

**dr.v.v.madhav@kluniversity.in

Online published on 25 June, 2015.

Abstract

The search for optimal capital structure that maximizes firms’ value and shareholder wealth has received significant attention in the academic community and also in the real world. There are different opinions on optimal capital structure. However, capital structure is a proper mix of the debt and equity. If there is a proper ratio of debt to equity, the firm is able to survive in existing competitive environment. According to several studies, capital structure has an impact on the performance of an organization. So, every company should plan for the good mix of debt to equity in order to gain the growth in its value. This study mainly focused on to derive the facts related to the capital structure design, and its impact on the organization including the performance, by using various theories and tools. The study has the net profit as indicator of the overall performance of the organization. The result shows that, the capital structure has close relationship with company performance, and it is influencing the overall performance of the organization.

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Keywords

Capital structure, debt equity ratio, leverage, corporate performance, organization.

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