Essay --

Chapter 1Introduction1.1 Introduction One of the most roughhewn ways for a impregnable to operate or finances its assets is metropolis social organisation. Capital social structures refer as a combination of equity, debt and hybrid securities that rehearse in the trusty operation. In a perfect market, transaction or bankruptcy cost, inefficient information and taxes will not exist. Therefore, Modigliani and Miller created a surmisal of corking structure in a perfect market. The use of uppercase structure is important as it affect the firm profitability. monetary decision of a business organization becomes one of the important decisions that commonly will re constitute by crownwork 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 able to iden tify the optimal capital structure will help the companies to increase the firm tax income 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 order conjecture and the trade off theory (Ana, Dragan & Monica, 2012). Both of this theory provides a different relationship between the capital structure and profitability. found on the study of Zabri (2012), the pecking order theory provide a proscribe impact of profitability on leverage while the trade-off theory provide a positive 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 narrate on the relationship between the c apital structure and profitability, 24 of customary listed companies in Sarawak Kuala Lumpur Stock Exchange (KLSE), Malaysia are chosen to test it. solely the financial statement for 24 companies will record accurate and decently in order to create an accurate test or relationship. The origination of the research proposal will be discussed in chapter 1. In chapter 2, publications review will be discussed on various views of previous researches which disturb to our topic. Research methodology and the data collection will be present in chapter 3 while chapter 4 will discuss some the result and discussion on the result. A conclusion and policy import will be discussed in the final chapter of this study.