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Influence the capital structure on the cost of capital and enterprise value in multinationals

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  • NICOLETA BARBUTA-MISU

    (Business Administration Department, “Dunarea de Jos” University of Galati)

Abstract

The main problems identified in determination of capital structure are referred to identifying the source of relevant funds, evaluation of risks generated by using some funds and their costs in order to ensure the autonomy of the enterprise. The objective of any company is to achieve optimal capital structure, which is approached by minimizing average cost of capital and maximizing the market value of the company. Thus, this paper aims to study the influence of capital structure on the cost of capital and enterprise value, in the case of two multinational companies, in order to identify optimal financial structures, and the differences between them.

Suggested Citation

  • Nicoleta Barbuta-Misu, 2012. "Influence the capital structure on the cost of capital and enterprise value in multinationals," EuroEconomica, Danubius University of Galati, issue 4(31), pages 7-20, November.
    • Handle: RePEc:dug:journl:y:2012:i:4:p:7-20
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    File URL: http://journals.univ-danubius.ro/index.php/euroeconomica/article/view/1612/1410
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    References listed on IDEAS

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    2. Singh, Kuljot & Hodder, James E., 2000. "Multinational capital structure and financial flexibility," Journal of International Money and Finance, Elsevier, vol. 19(6), pages 853-884, December.
    3. Yasuhiro Yonezawa & Hiroshi Yamaguchi & Takeshi Yamamoto & Tomonari Nambu, 2006. "Capital Structure Choice of the Foreign Affiliates of Japanese Multinational Firms : Characteristics and Problems," Microeconomics Working Papers 21894, East Asian Bureau of Economic Research.
    4. Andreas Hoffjan & Michael Rösmann, 2002. "Capital structure design of foreign subsidiaries in multinational corporate groups with a German parent company," Working Papers hal-00593870, HAL.
    5. Mari Avarmaa & Aaro Hazak & Kadri Männasoo, 2011. "Capital structure formation in multinational and local companies in the Baltic States," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 11(1), pages 125-146, July.
    6. Kornbluth, Jonathan S. H. & Vinso, Joseph D., 1982. "Capital Structure and the Financing of the Multinational Corporation: A Fractional Multiobjective Approach," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 17(2), pages 147-178, June.
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    8. Shapiro, Alan C., 1978. "Financial Structure and Cost of Capital in the Multinational Corporation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 13(2), pages 211-226, June.
    9. Hoffjan, Andreas & Rosmann, Michael, 2002. "Capital structure design of foreign subsidiaries in multinational corporate groups with a German parent company," Arbeitspapiere des Lehrstuhls für Betriebswirtschaftslehre, insbesondere Controlling 4-1, University of Münster, Chair of Management Accounting.
    10. Chkir, Imed Eddine & Cosset, Jean-Claude, 2001. "Diversification strategy and capital structure of multinational corporations," Journal of Multinational Financial Management, Elsevier, vol. 11(1), pages 17-37, February.
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    Cited by:

    1. Florentina MOISESCU & Madalina Cosmina MANOLE & Cristina Georgiana DASCALEANU, 2012. "Investments in Human Capital in Romania," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 71-78.

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