ANANALYSISOFTHEPHARMACEUTICALA ND CHEMICAL INDUSTRIES IMPACT ONINDIA'SCAPITALSTRUCTURE

The present paper examines the factors influencing capital structure of the companiesbelongingtotwoindustriesnamelyPharmaceuticalsandChemicalthatarelistedatMumbaiStockExchange Ltd. The secondary data has been used to achieve the objective of this study. The dataperiodranges from 1999 to 2015 (i.e. 17 years).The chosen period covers a complete businesscycle i.e.both recessionary and booming phases of the industries. Here, the researcher has testedthe nullhypothesis: that there is no significant relationship between the financial leverage andvariousindependent variables. The statistics like coefficient of determination (R2), ANOVA (F),DurbinWatson, and regression coefficients resulting from the application of Multiple Regressionmodelwere applied for the analysis of data. The results indicated that cost of debt and cost ofequity arefound having negative values of regression coefficients and the same are significant at2% and1% level respectively in case of pharmaceuticals.. The relationship between liquidityandleverage is negative (-0.199), but statistically significant. It means that the leverage of thefirm isaffected by liquidity of the firm. In case of steel industry two variables namely size of thefirmand operating leverage are having positive and significant regression coefficients indicatingapositive relationship with the leverage ratio whereas cost of debt, cost of equity, and DPRarefoundhavingnegativeandinsignificantcoefficientsduringtheyears2009and2015.