The Determinants of Capital Structure in a Tax Free Environment: An Extreme Bounds Analysis

Imad Moosa, Wafaa Sbeiti

Research output: Contribution to journalArticlepeer-review

Abstract

Extreme bounds analysis is used to identify the determinants of capital structure in a tax-free environment, using data from Oman. The results show some evidence for the importance of liquidity, tangibility, growth opportunities and stock price performance. The findings are more supportive of the pecking order theory than the trade-off theory, but in general they imply that the capital structure decision does matter, even in the absence of taxes.
Original languageAmerican English
Pages (from-to)869-888
JournalInternational Research Journal of Applied Finance
Volume3
Issue number6
StatePublished - 2012

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