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Option for Credit in Fundamenting the Financial Structure of Enterprise

Author

Listed:
  • Nicolae SICHIGEA
  • Dan Florentin SICHIGEA

    (University of Craiova)

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.

Suggested Citation

  • Nicolae SICHIGEA & Dan Florentin SICHIGEA, 2008. "Option for Credit in Fundamenting the Financial Structure of Enterprise," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 3(36), pages 1088-1098, May.
  • Handle: RePEc:aio:aucsse:v:3:y:2008:i:11:p:1088-1098
    as

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    File URL: http://feaa.ucv.ro/AUCSSE/0036v3-005.pdf
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    References listed on IDEAS

    as
    1. Carlo Dell'Aringa & Laura Pagani, 2007. "Collective Bargaining and Wage Dispersion in Europe," British Journal of Industrial Relations, London School of Economics, vol. 45(1), pages 29-54, March.
    2. Lucio R. Pench & Paolo Sestito & Elisabetta Frontini, 1999. "Some unpleasant arithmetics of regional unemployment in the EU. Are there any lessons for EMU?," European Economy - Economic Papers 2008 - 2015 134, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Alun H. Thomas, 2002. "The Costs and Benefits of Various Wage Bargaining Structures; An Empirical Exploration," IMF Working Papers 02/71, International Monetary Fund.
    4. Stephen Nickell & Luca Nunziata & Wolfgang Ochel & Glenda Quintini, 2001. "The Beveridge Curve, Unemployment and Wages in the OECD from the 1960s to the 1990s - Preliminary Version," CEP Discussion Papers dp0502, Centre for Economic Performance, LSE.
    5. Brunello, Giorgio & Lupi, Claudio & Ordine, Patrizia, 2001. "Widening differences in Italian regional unemployment," Labour Economics, Elsevier, vol. 8(1), pages 103-129, January.
    6. Cukierman, Alex & Lippi, Francesco, 1999. "Central bank independence, centralization of wage bargaining, inflation and unemployment:: Theory and some evidence," European Economic Review, Elsevier, vol. 43(7), pages 1395-1434, June.
    7. Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, pages 1150-1175.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    credit; effect of financial leverage; financial structure; cost of capital;

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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