An econometric analysis of companies in the United States, based on their capital structures, country level and firm level variables was conducted. The work is supported by provision of theory on capital structures, the various discussions on capital structures and the macroeconomic and firm level factors that play a critical role in capital structures are presented. Now much of these factors are seen to be based out of the country specific details.
A correlation study between different variables, such as net sales, goods sold, GDP values among others are carried out. Capital structures based impact is observed and the difference between theory and practice in terms of actual regression value calculations are discussed.
The work is prepared in the context of being a trainee analyst at an investment company in London. The management of an investment company has requested data on the investigation of factors that affect the capital structure of firms with respect to the United States. So, an investigation of capital structures, firm and macro-economic level factors with respect to firm’s decision making is required here. The theory behind capital structures and macroeconomic and firm-level variables are presented.