ABSTRACT
This chapter seeks to ascertain if there actually has been a decrease in the amount of debt in the typical firm's capital structure over. It also seeks to determine if the change in capital structure is different for New York Stock Exchange (NYSE) and NASDAQ dummy variable (NASDAQ)firms. Our base sample is all firms listed on the NYSE and NASDAQ stock markets that are reported on the COMPUSTAT database. Firms in the utilities and financial services industries were eliminated from the base sample because of the potential biases associated with the heavy regulation of those industries. Examining the Debt/Assets ratio, the noticeable decrease in the amount of debt in NASDAQ firms' capital structures is not evident for NYSE firms. In fact, there is no discernible trend in the capital structures of NYSE firms. The relationship between firm profitability and capital structure is much weaker.
