This paper analyses the factors influencing debt proportions in the capital structures of companies in Malaysia. Predictors of debt proportions are chosen based on apriori reasoning that underlies the current capital structure theories that are oriented to bankruptcy risks, asymmetric information, agency conflicts, non-debt tax shields apart from those with conventional capital structure explanations. This is a continuous cross-sectional regression analyses that was carried out for a period of two years on a sample of 95 and 82 companies chosen from the companies listed on Bursa Malaysia Berhad (KLSE). Size, Safety Considerations, Deviations from Target Debt variables have emerged as the most significant predictors of debt proportions; and Non-Debt Tax Shields, Profitability, Agency Conflicts, and Free Cash Flow Variables have emerged as other debt predictors of importance.
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