Moro, Andrea; Lucas, Michael; Bazzanella, Claudio and Grassi, Edo
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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 structure depends only on the mix of short and long term debt. The paper then presents a model, developed by practitioners for optimising the debt mix and demonstrates its practical application using an Italian firm's debt structure as a case study.
|Item Type:||Conference Item|
|Copyright Holders:||2009 The Authors|
|Keywords:||capital structure; equity; short-term debt; long-term debt;|
|Academic Unit/Department:||Open University Business School|
|Depositing User:||Andre Moro|
|Date Deposited:||19 Oct 2009 10:33|
|Last Modified:||24 Feb 2016 04:35|
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