Abstract:
Aim of this study was to investigate whether the credit rating is an important
determinant other than the firm's characteristic to obtain optimal capital structure
focusing on the research hypothesis that the firms with higher credit along with the
other factors (FTOA, ROA and Size) tend to have more debt in their capital structure
of firms rated by Fitch Ratings Lanka Ltd. For this research, sample size of 40
observations (2 years data of 20 firms) was taken on the basis of convenience
sampling. Secondary data were used for the research and data were collected from
Fitch Rating Lanka, Colombo Stock Exchange and Annual reports of the firms.
Results obtained by using regression analysis.
