Abstract:
Objective of this study is to identifying effect of capital structure on stock price of
manufacturing sector in Sri Lanka. This study based on the typical analysis of the
impact of capital structure on stock price. Based on literature, debt to equity ratio,
interest coverage ratio, debt to total asset ratio used as independent variables and
stock price used as a dependent variable. Secondary data were collected from annual
reports. As the final result of the research, expects to appear at model which may
help to determine the impact of capital structure on stock price. Expected outcome
of the multiple regression models, hypothesis testing, and correlation analysis
analyzed by using SPSS. In conclusion, summed up the work observed findings there
were debt to equity ratio and interest coverage ratio significantly impact to the stock
price as negatively and positively respectively while debt to total asset ratio was not
significant. Finally, this research derived the prospects for the further study of the
problem and recommendations for the possible use of the results in practice.
