What is the Optimal Financial Structure Applicable to All Companies

To maximize value, companies must adopt the optimal financial structure. However, identifying this structure is not easy. Literature does not give satisfactory results. To remedy this difficulty, we have sought the optimal financial structure applicable to all companies. Thus, in a new approach by t...

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Bibliographic Details
Published in:International journal of finance & banking studies 2022-09, Vol.11 (3), p.56-61
Main Author: Djomo, Chimba Ulrich
Format: Article
Language:English
Subjects:
Bankruptcy
Borrowing
Corporate finance
Costs
Equity
Literature reviews
Mathematical models
Tax rates
Online Access:Get full text
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Summary:To maximize value, companies must adopt the optimal financial structure. However, identifying this structure is not easy. Literature does not give satisfactory results. To remedy this difficulty, we have sought the optimal financial structure applicable to all companies. Thus, in a new approach by the cost of capital, using modelling, we identify an optimal financial structure model that can neutralize the risk of default of debt:   D/K  with t ? i but t > i.
ISSN:2147-4486
2147-4486
DOI:10.20525/ijfbs.v11i3.2038