Spatio- Temporal Variations Of The Biomass And Primary Production Of Phytoplankton In Koka Reservoir

Capital structure has attracted intense debate in the financial management arena for nearly half-rncentury. The basic question of whether a unique combination of debt and equity capitalrnmaximizes firm value, and if so, what factors determine a firm‘s optimal capital structure havernbeen the subject of frequent debate in the capital structure literature. This paper examinesrnempirically the problem of Construction Companies, capital structure decisions using firm-levelrnpanel data with the aim of identifying what determines both externally as well as internally therncapital structure of Ethiopian construction industry? And to understand which of the capitalrnstructure theories are appealing to them? To do this, the study examines the impact of eight firmrnspecific variables and two macroeconomic variables on the leverage of the sampled constructionrnfirms. A sample of 30 companies were taken from the population of 266 companies by usingrnsimple random sampling and secondary data (Panel data i.e. which embodies information acrossrnboth time and space.) was collected through structured record review from audited financialrnstatements of selected companies for the period of six years (2001-2006EC). And the collectedrndata would be analyzed on quantitative basis through multiple regressions by using Eviews6rnsoftware packages. The panel random effect estimation result revealed that, debt ratio (leverage)rnhave: a positive relation, with asset tangibility, growth opportunity, and size of the firm. But,rnhave a negative relation, with profitability, liquidity and risk (earning volatility). However, agernof a firm, non-debt tax-shield, inflation and GDP have no statistically significant impact on arnfirm‘s choice of debt ratio. The results mostly appear to support the pecking order theory ofrncapital structure. From the view point of the determinants of capital structure, the findings ofrnthis study would assist in establishing financial policy guidelines that will mitigate financial riskrnin the various firms. Therefore, it is recommended that in carrying out their debt financingrndecision, the financial managers of Construction Companies, should ascertain and properlyrnmeasure those significant variables in order to have an optimum financing mix for their firms.rnKeywords: Capital Structure, Determinants of Capital Structure, Construction Company,rnpecking order theory, trade of theory, MM theory, and agency cost theory

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