Booth Revisited: Identifying the Determinants of Capital Structure in the Sugar Sector

The study assesses whether selected exogenous variables: tax rate, size, asset tangibility, volatility and profitability, affect capital structure in a significant manner in the sugar industry. It suggests that decision on capital structuring is found to be weakly affected by the variables chosen in our study. This is also consistent with the results of Booth et al (2001) where modern financial theory is found to be weakly portable across a group of developed and developing countries. It is recommended that more empirical work is done in order to understand the impact of capital structure choices.