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Long term financing decision at the level of companies

Author

Listed:
  • Dobrota, Gabriela
  • Chirculescu, Felicia Maria

Abstract

Debates on the financing needs registered a firm levels were a constant concern of specialists but especially managers. Majority opinion is that the financing of investment must be made by sources having character of permanence. However, a problem whose answer is not easily determined is the degree to which it may use its own sources, borrowed or rented, to record the lowest financing cost. Since the shareholders require a higher remuneration of capital investments superior to those on the financial market, managers must seek to reduce the cost of borrowed capital and the growth rate of financial return. In this paper are presented issues relating to the structure and potential sources and funding the decision on cost related to each funding opportunities.

Suggested Citation

  • Dobrota, Gabriela & Chirculescu, Felicia Maria, 2009. "Long term financing decision at the level of companies," MPRA Paper 17527, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:17527
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    Keywords

    financing firms management investments reduction of the cost of borrowed capital;

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G1 - Financial Economics - - General Financial Markets

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