The rationale behind the decisions of firms for how they choose their debt equity mix is still an unclear issue of interest. While some firms prefer debt financing, others prefer equity and the factors driving this decision remain ambiguous despite extensive theoretical literature and many empirical tests. In fact many researchers widely agree on the notion that capital structure is not irrelevant, yet still there is not a comprehensive model that incorporates empirical observations. While all available models can explain certain part of the facts, they also have problems with different facts and contradict with others.