Throughout the study objective was to find out the impact of capital structure on the
value of firm in the context of Bangladesh economy or industrial sector. In order to
achieve the goal this paper gathered secondary data of publicly listed companies traded in
Dhaka Stock Exchange (DSE) and Chittangong Stock Exchange (CSE) and used some
statistical tools to analyze all the financial information. To see the relationship between
capital structure and firm value in Bangladesh this paper considered share price as proxy
for value and different ratios for capital structure decision. The interesting finding of this
paper suggests that maximizing the wealth of shareholders requires a perfect combination
of debt and equity, whereas cost of capital has a negative correlation in this decision and it
has to be as minimum as possible. This is also seen that by changing the capital structure
composition a firm can increase its value in the market. Nonetheless, this could be a
significant policy implication for finance managers, because they can utilize debt to form
optimal capital structure to maximize the wealth of shareholders.