Essay --

Chapter 1Introduction1.1 Introduction One of the most special K ways for a firm to operate or finances its assets is swell structure. Capital structures refer as a combination of equity, debt and hybrid securities that used in the firm operation. In a perfect market, transaction or bankruptcy monetary value, inefficient information and taxes will not exist. Therefore, Modigliani and Miller created a theory of capital structure in a perfect market. The use of capital structure is important as it affect the firm profitability. Financial decision of a military control organization becomes one of the important decisions that normally will represent by capital structure. Musiega, et al. (2013) claimed that choosing an appropriate capital structure will benefit the firm as it help a firm to adapt with various challenging and competitive business world thereby become more profitability. According to Zeitun and Tian (2007), managers who are fitting to identify the optimal capital structu re will help the companies to increase the firm revenue or profitability and reduce the firms cost of finance. Nutshell, capital structure of a firm can influence a firm profitability a firm health determined by a firm capital structure. By analyzing the choice of firms capital structure, financial behavior of a firm can be explained by the pecking aver theory and the trade off theory (Ana, Dragan & Monica, 2012). Both of this theory provides a different relationship between the capital structure and profitability. Based on the take of Zabri (2012), the pecking say theory provide a negative impact of profitability on leverage while the trade-off theory provide a unconditional relationship between the capital structure and profitability. There are some of the findings... ...o investigate the relationship between the capital structure and profitability of firm. In order to have clearer and accurate evidence on the relationship between the capital structure and profitability, 24 o f public listed companies in Sarawak Kuala Lumpur Stock Exchange (KLSE), Malaysia are elect to test it. All the financial statement for 24 companies will record accurate and correctly in order to create an accurate test or relationship. The introduction of the research proposal will be discussed in chapter 1. In chapter 2, literature review will be discussed on various views of previous researches which occupy to our topic. Research methodology and the data collection will be present in chapter 3 while chapter 4 will discuss about the depart and discussion on the result. A conclusion and policy implication will be discussed in the final chapter of this study.