1Professor and Dean, Department of Business Administration, St. Joseph Engineering College, Vamanjoor, Mangaluru, Karnataka
2Faculty, PG, Department of Commerce, St. Aloysius College (Autonomous), Mangaluru, Karnataka
This study attempts to analyze the impact of capital structure on financial performance, of banks i.e. how the proportion of debt and equity will have an impact on financial performance. The proportion of debt and equity is determined by the corporate managers. The financial performance of a firm is directly affected by the capital structure decision. Maximization of shareholders’ wealth is one of the main objectives of firm's management. To achieve this objective proper care and attention must be given while taking rational financial decisions regarding optimal capital structure which in turn reduces the cost of capital. Corporate managers should choose the combination which will maximize profitability and the firm's market value.
Capital structure, financial performance, Debt to equity, Debt to total assets
