Investment Models with Uniform Debt Repayment and their Application

Peter Brusov, Tatiana Filatova and Natali Orekhova
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Tatiana Filatova: Financial University under the Government of Russian Federation
Natali Orekhova: Financial University under the Government of Russian Federation

Chapter Chapter 18 in The Brusov–Filatova–Orekhova Theory of Capital Structure, 2023, pp 357-364 from Springer

Abstract: Abstract In the previous сhapter, we have established investment models with debt repayment at the end of the project, well proven in the analysis of real investment projects. In practice, however, a scheme of uniform debt repayment during the duration of the project is more extended. In this chapter, we describe new investment models with uniform debt repayment during the duration of the investment project, quite adequately describing real investment projects. Within these models it is possible, in particular, to analyze the dependence of the effectiveness of investment projects on debt financing and taxation. We will work on the modern theory of capital cost and capital structure developed by Brusov–Filatova–Orekhova (Brusov and Filatova 2011; Brusov et al. 2011a, b, c, 2012a, b, 2013a, b, 2014a, b; Filatova et al. Bull FU 48:68–77, 2008; Brusova 2011) as well as on perpetuity limit (Мodigliani and Мiller Am Econ Rev 48:261–297, 1958; Am Econ Rev 53:147–175, 1963; Am Econ Rev 56: 333–391, 1966). In Chap. 30 we consider the application of the investment models with uniform debt repayment to rating methodology.

Keywords: Investment models; Uniform debt repayment; Efficiency of investments; Brusov–Filatova–Orekhova (BFO) theory; Debt financing (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-27929-4_18

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DOI: 10.1007/978-3-031-27929-4_18

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