Modigliani and Miller (1958) were the first ones to landmark the topic of capital structure and they argued that capital structure was irrelevant in determining the firm’s value. Lubatkin and Chatterjee (1994) have proved that there exists a relationship between capital structure and firm value. Rajan and Zingales (1995) as well as Fama and French also (1998) found that there was negative relationship between debt and financial achievement. Champion (1999) found positive association between leverage and firm performance. Booth et al., (2001) in their study found that in the developing countries, the profitability of a firm has a consistently negative relationship with financial leverage. Siddiqui and Rahman (2002) in their study attempted to present a comparison of capital structures between MNCs and local blue chip companies enlisted with the DSE. The results indicated that the capital structures of the firms depend on the industry within which they operate. Islam and Islam (2003) had studied on the linkage between capital structure and profitability of North Bengal Paper Mills Limited. The unfavorable debt-equity ratio had adversely affected the profitability of the mill measured in terms of ROCE and ROI. Uddin, Hossain and Abdullah (2004) had undertaken a research on capital structure of DSE listed companies. The aim of their study was to analyze the effect of DAR (Debt to Asset Ratio) on risk and return of shareholders’ stock. They found that DAR had insignificant positive correlation with the average stock returns. Zeitun and Tian (2007) as well as Abor (2007) indicated that firm performance is negatively related to capital structure.