Table 2 present the results of three regression models. There is no multicallinearity in all models according
tolerance coefficients and variance inflation factor (VIF). However, there is no autocorrelation for model 3 but
positive autocorrelation for model 1 and model 2 according to the Durbin-Watson (DW). According R square
adjustment coefficients, the regression line fit to data imperfectly.
The results emphasize a significant positive relationship between firm size and leverage in accordance with
trade-off theory. The bigger firm is, the higher debt financing raise. There is a significant inverse relationship
between profitability and leverage referring to pecking order theory. The more profit a firm gains, the less debt uses.