Option for Credit in Fundamenting the Financial Structure of Enterprise

Nicolae Sichigea and Dan Florentin Sichigea
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Dan Florentin Sichigea: University of Craiova

Annals of University of Craiova - Economic Sciences Series, 2008, vol. 3, issue 36, 1088-1098

Abstract: The development of the economic activities make almost inevitable the necessity of completing the equities with sources which represent the object of the enterprise’s leveraging. In our paper, we intend to underline the effects of a correct debt policy, concretized in an optimum capital structure, respectively in establishment of such report between the debt capital and the equities that could determine a minimum weighted average cost of capital. Reaching the objective of the optimum financial structure could be achieved most of the time, on a pragmatic way, based on the analysis of many hypothesis of leveraging, the managers taking the option towards the maximization of the firm’s value.

Keywords: credit; effect of financial leverage; financial structure; cost of capital (search for similar items in EconPapers)
JEL-codes: D00 D92 G30 G32 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:aio:aucsse:v:3:y:2008:i:11:p:1088-1098

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