In this research, we test two models with the purpose of finding the best empirical explanation for the capital structure at Companys of 50 Biggest Market Capitalization. The models tested were developed to represent the Pecking Order Theory and the Trade-off Theory. The sample consists of firms listed in the Indonesia Stock Exchange from 2006 through 2008. By using OLS methods, we aimed at establishing which of the two theories has the best explanatory power for Companys of 50 Biggest Market Capitalization. The analysis of the outcomes led to the conclusion that the pecking order theory provides the best explanation for the capital structure of those firms.  Keywords: Capital Structure, Pecking Order Theory and Trade-off Theory
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