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2018 | OriginalPaper | Buchkapitel

5. New Mechanism of Formation of the Company’s Optimal Capital Structure, Different from Suggested by Trade-Off Theory

verfasst von : Peter Brusov, Tatiana Filatova, Natali Orekhova, Mukhadin Eskindarov

Erschienen in: Modern Corporate Finance, Investments, Taxation and Ratings

Verlag: Springer International Publishing

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Abstract

Under condition proved by us, insolvency of the well-known classical trade-off theory and question of finding new mechanisms of formation of the company’s optimal capital structure, different from the one suggested by trade-off theory, become very important. One of the real such mechanisms is developed by us in this chapter. It is based on the decrease of debt cost with leverage, which is determined by growth of debt volume. This mechanism is absent in perpetuity Modigliani–Miller theory, even in modified version, developed by us, and exists within more general modern theory of capital cost and capital structure by Brusov–Filatova–Orekhova (BFO theory).

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Vorheriges Kapitel Bankruptcy of the Famous Trade-Off Theory

Nächstes Kapitel The Global Causes of the Global Financial Crisis

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Titel: New Mechanism of Formation of the Company’s Optimal Capital Structure, Different from Suggested by Trade-Off Theory
verfasst von: Peter Brusov
Tatiana Filatova
Natali Orekhova
Mukhadin Eskindarov
Verlag: Springer International Publishing
Buch: Modern Corporate Finance, Investments, Taxation and Ratings
Print ISBN: 978-3-319-99685-1

Electronic ISBN: 978-3-319-99686-8

Copyright-Jahr: 2018
DOI: https://doi.org/10.1007/978-3-319-99686-8_5