Popescu, Eleodor (2011): Analysis of the influence factors on the capital cost.
Download (169kB) | Preview
The capital structure refers to the long-term financing types used by the enterprises (for example, reinvested profit, long-term shares and debts) and the way they are financed by a combination of the own capital and debts. An optimal structure of the capital involves making some important decisions regarding the maximization of the enterprise value by their managers. But these decisions are not important only for maximizing the enterprise value, but also for the impact they have on the enterprises ability to face the competition existing on the market. An optimal structure of the capital should provide to the shareholders bigger gains than the ones they would gain from an economical entity fully financed by the own capitals. In the attempt to explain the way the enterprises finance their assets and the factors influencing these financing decisions, a series of theories and models of the capital structure have been suggested. These theories and models try to explain the percentage of the debts and of the own capital found in the enterprises balance sheet. Among the theories of the capital structures that have been imposed in time, Modigliani and Miller’s theorem (1958) may be considered as the starting point of explaining the capital structure, although, it subsequently proved to be a purely theoretical model with no solid empiric funding . The basic idea of this classic theory is that, in the absence of the taxation and on a perfect market, the value of an enterprise is not influenced by the way it is financed.
|Item Type:||MPRA Paper|
|Original Title:||Analysis of the influence factors on the capital cost|
|English Title:||Analysis of the influence factors on the capital cost|
|Keywords:||Capital structure, target share of indebting, theory of ranking the financing sources, timing with the market, influence factors of the capital structure specific to the enterprise, panel data patterns, generalized method of moments.|
|Subjects:||D - Microeconomics > D2 - Production and Organizations|
|Depositing User:||Marian Lucian ACHIM|
|Date Deposited:||20. Jun 2011 16:19|
|Last Modified:||19. Feb 2013 00:03|
Andrei, T & Burbonnais, R. (2008), Econometrics. Economical Press – Bucharest;
Baltagi, B. (2005) Econometric analysis of panel data third edition. John Wiley & Sons Press-England;
Bătrâncea, I. Dumbravă, P. Bătrâncea, L. (2006), Balance Sheet of the Economical Entity. Alma Mater Press-Cluj-Napoca;
Buiga, A. Parpucea, I. Dragoş, C. Lazăr, D. (2008), Descriptive Statistics. Mediamira Press-Cluj-Napoca;
Dragotă, V. (2003), Dividend Policy. All Beck Press- Bucharest;
Fătu, S. (1998) Romanian Capital Market Seen from Inside. Vox Press- Bucharest;
Nicolescu, O. (2001) Management of Small and Average Enterprises. Economical Press -Bucharest;
Nistor, E. I. (2004) Theory and Practice in Financing the Enterprise. Scientific Publishing House -Cluj-Napoca;
Stancu, I. (2002), Finances. Economical Press-Bucharest;
Todea, A. (2008), Investments. Scientific Publishing House-Cluj-Napoca;
Toma, M. & Alexandru, F. (1998), Finances and Financial Administration of Enterprise. Economical Press - Bucharest.