Author(s): Riyad Al-Hindawi
The Objective of the study is to investigate the determinants of capital structure in the UK for the period 2012-2017 and the impact of credit rating on capital structure. The study employs a panel data of 138 firms, of which 69 are credit rated and the remaining are non-rated. The study uses a static model in order to investigate the determinants of capital structure and the effects of credit ratings on leverage. The results show that, as a category, firms with a credit rating use more debt than non-rated firms. However, within the categories, the results suggest that the level of firms’ credit ratings is negatively related to leverage.