Determinants of Corporate Debt Financing

Capital structure has been a topic of heated discussion for several decades. Debt financing is one of the aspects of capital structure that reflects corporate governance practices. Optimal debt management may be helpful in firms' cash management and encouraging managers to perform well. This paper aims to investigate the determinants of debt level, between 2010 and 2017 for FTSE 250 firms, building on Alkhatib model (2012). The results of the analysis suggest that long-term debt plays an important role in debt structure; firm size, profitability and asset structure are negatively influence firm leverage; debt is positively related to growth opportunities; there is no evidence that profitability, asset structure and liquidity are positively associated with long-term debt.