The optimal capital structure in agricultural cooperatives under the revolving fund cycles

Yung-Chang Wang
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Yung-Chang Wang: Department of Banking and Finance, Chinese Culture University, Taipei, Taiwan

Agricultural Economics, 2016, vol. 62, issue 1, 45-50

Abstract: Due to the financial features specific to agricultural cooperatives, the paper constructs a constrained-maximizing model under the assumption that the financial objective of an agricultural cooperative is to maximize the present value of the patron after-tax total income on an infinite time horizon by choosing the dividend rate, the cash patronage refund rate, and the length of the revolving fund cycles. The model is solved numerically in a numerical illustration. In equilibrium, the optimal capital structure is derived for the agricultural cooperative. The effects of the changes in personal tax rates and discount rates are also explored.

Keywords: cash patronage refund rate; constrained-maximizing model; dividend rate; present value (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:62:y:2016:i:1:id:204-2015-agricecon

DOI: 10.17221/204/2015-AGRICECON

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