Dear Mohammed Faez Hasan,

I think the issue of capital structure is still an open question. The evidence on this is ambiguous. What exactly is your question? Excuse me but I did not fully understand your question.

I meant that Optimal Capital structure not found yet

Asalam alekum, in the Holy month of Ramadan.

The issue of Optimal Capital Structure (OCS) is an open question. There are good arguments on both sides. I think the issue of OCS depends on many factors, and there is no single answer.

Follow

Here is my position.

We state a theory.

Then we try to find evidence for the theory.

There are three possibilities.

The theory is wrong.

The evidence is wrong.

Both the theory and evidence are wrong.

With respect to OCS, it is not clear which is the right possibility.

Optimum Capital Structure,I suppose, cant be depicted as such.It is basically a relative concept based upon a number of factors like nature of industry,the phase of business cycle,the prevailing economic environment,the promoters stake,the guidelines by the regulator etc.