An empirical analysis of the capital structure of Maldivian listed companies / Umaira Mohamed

Abstract:
This research is focused on the capital structure of the listed companies in the Republic of Maldives with the aim of identifying the factors, its extent/direction and the effects of the capital structure to the corporate performance. Therefore, five companies registered in the Maldives Stock Exchange (MSE) were selected as the research sample. Annual Financial Statements of those listed companies were referred to obtain the relevant accounting ratios.
Capital structure of a company is an important area that is emphasized by investors when making investment decisions. Thus capital structure planning is a crucial part of corporate planning. And it is often argued that the right mixture of capital structure increases the capacity of the firm in facing the losses and challenges in the financial markets. This became more important when the academicians establishes the relationship of capital structure and firms' value, thus by opening the gate for further empirical studies of the topic. Many studies have been done in this topic and researches have shown some empirical evidence that firm's corporate performance is also associated to the capital structure.
However, the finding of this research was not consistent with previous studies in this area and most importantly there is not strong evidence to conclude that capital structure has any influence on corporate performance.