* General Manager, Finance, CSR Limited. 1 For the purposes of this paper, capital management refers to the process of determining the optimal capital structure of a non-financial company. There are, of course, a number of issues that relate to the optimal capital investment strategy that are not addressed here. 2 A leveraged buy-out (LBO) facilitates equity ownership of a company via a highly-...

This paper argues that the existing finance literature is inadequate with respect to its coverage of capital structure of small and medium sized enterprises (SMEs). In particular it is argued that the cost of equity (being both conceptually ill defined and empirically non quantifiable) is not applicable to the capital structure decisions for a large proportion of SMEs and the optimal capital st...

Despite many past papers concerning a …rm’s capital structure, the valuation of debt and equity and cost of capital, there are few that explicitly codify contingent sharing rules for the …rm’s cash‡ow over time. We motivate equity and debt valuation by modeling tax and distress costs using cap and ‡oor technology as well as a default option at maturity. This approach sheds light on theoretical ...

Demand for coal increased because of the energy crises that occurred in Europe and China. Due to this growth demand, prices have gone up globally as well. This can be an opportunity companies Indonesia one countries with largest reserves world. PT Bumi Resource Tbk, businesses Indonesia’s deposits. Additionally, most supplied by Tbk is consumed domestically, it So, necessary increase production...

We model a risk-averse firm owner who wants to maximize the intertemporal expected utility of firm’s dividends. The optimal dynamic control problem is characterized by two stochastic state variables: equity value, and profitability (ROA) _rm. According empirical evi-dence, we let follow mean reverting process. solved in quasi-explicit form computing both dividend debt. Finally, calibrate actual...