OPTIMAL CAPITAL STRUCTURE - OBJECTIVE OF THE FINANCING DECISION

LUIZA APOSTOL

Abstract


Precise determination of the proportions of different funding sources that define the optimal capital structure of a company as well as identifying the determinants of choice between various sources of funding to maximize firm value were subject, especially in the last five decades, of numerous works in corporate finance. Despite the wording of many theories that have tried to identify how firms funding decisions are based and to define the idea of financial structure optimality, a complete theory of companies financing options has not yet been delineated. This paper sheds light on the complexities of choosing optimal financial structure and shows an arbitration between possible financing structures to maximize enterprise value.

Keywords


capital structure; value of company; weighted average cost of capital

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References


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Copyright (c) 2017 Luiza Apostol

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LUCRĂRI ȘTIINȚIFICE MANAGEMENT AGRICOL

ISSN print 1453-1410
ISSN online 2069-2307
(former ISSN 1453-1410, E-ISSN 2069-2307)

PUBLISHER: AGROPRINT Timisoara, Romania
PAPER ACCESS: Full text articles available for free
FREQUENCY: Annual
PUBLICATION LANGUAGE: English

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