Abstract:
The capital structure of a company refers a combination of the long term used
by the firms. The theory of capital structure is closely related to the firm’s cost
of capital. The decision regarding to the capital structure or financial leverage is
based on the objective of achieving maximization of shareholder’s wealth.
Present study is an attempt to evaluate the effect of capital structure on share
price in Sri Lankan Listed companies over the period of 2008 to
2012.Correlation analysis and regression analysis were used to analysis the
relationship between Capital Structure and share price in listed companies in Sri
Lanka. Analyzed results revealed that there were significant relationships
between share price and capital structure.
