2026-04-17T20:19:57Zhttps://recercat.cat/oai/requestoai:recercat.cat:10459.1/469882024-12-05T22:08:46Zcom_2072_3622col_2072_479130
RECERCAT
author
Salvador Figueras, Manuel
author
Vendrell Vilanova, Anna
2024-12-05T22:08:46Z
2024-12-05T22:08:46Z
2014-01-31T12:28:46Z2014-01-31T12:28:46Z2012
http://hdl.handle.net/10459.1/46988
In the present research we have set forth a new, simple, Trade-Off model that would allow us to calculate how much debt and, by default, how much equity a company should have, using easily available information and calculating the cost of debt dynamically on the basis of the effect that the capital structure of the company has on the risk of bankruptcy; in an attempt to answer this question. The proposed model has been applied to the companies that make up the Dow Jones Industrial Average (DJIA) in 2007. We have used consolidated financial data from 1996 to 2006, published by Bloomberg. We have used simplex optimization method to find the debt level that maximizes firm value. Then, we compare the estimated debt with real debt of companies using statistical nonparametric Mann-Whitney. The results indicate that 63% of
companies do not show a statistically significant difference between the real and the estimated debt.
(c) Edicions de la Universitat de Lleida, 2012 (c) AEGERN, 2012 info:eu-repo/semantics/openAccess
Bankruptcy cost
Capital structure
Trade-off
Dynamic analysis
Empreses -- Finances
Deute empresarial
Capital
Capital de risc
Optimal capital structure: a trade-off model and its empirical testing
workingPaper publishedVersion