The relationship of debt and equity and all of its possibilities is significant when it

comes to the earnings of the organization. In other terms, designing an optimal capital
structure that will maximize the wealth of the company at the lowest cost of capital is
one of the crucial factors that most companies focus on. Aside from Optimal Capital
Structure, the topic also focuses on the footwear industry that is emerging in India. The
country currently produces 2.2 Billion out of 23 Billion foot wears through the global
economy. This makes the country the second largest footwear supplier worldwide,
before China, as well as the largest consumer of footwear. Recently, according to
Euromonitor, the market grew, from 2015 – 2016, at 22%. Globally, a growth of 7% was
made in the same segment and expected to grow more at 12% last 2020.
Even if India is classified as the second largest footwear supplier globally, most
of its industry is coming from the unorganized sector. With the new age of E-commerce,
the industry has a new platform for their business. Aside from the rise of online
business, some trends also affect the increase in demand for foot wears. One of which
is the “fitness” trend that younger generations are into as well as celebrities, on sports
and on Screens that influences the growth of the trend. Aside from influencers, the
necessity of footwear on Schools, competitions in sports, household consumption,
wherein 90% of total production falls into, are also factors of the increasing demand.

Additionally, legislators and governing officials can construct applicable and suitable
policies and laws relating to production and export of footwear most especially in taxes
such as lowering Goods and Service Tax (GST) in India to promote the exportation and
growth of this industry which is undeniably vigorous in the economy. Also, investors can
assess the risk involved in the securities issued by these footwear companies before
investing since the capital structure that they employ lacks an adequate amount of long-
term debt which can possibly be disadvantageous in certain cases. Concludingly,
managers must choose an optimal capital structure – the ideal mixture of debt and
equity that maximizes value while lowering the overall cost of capital, considering
profitability since interest on various debts is tax-deductible. After all, striking the right
balance is what capital structure is all about.
V. BIBLIOGRAPHY

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White, C. B. (2021, July 18). How Does a Company's Capitalization Structure Affect Its
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