TY - JOUR
T1 - Optimal capital structure. A multi-period programming model for use in financial planning
AU - Brick, Ivan E.
AU - Mellon, W. G.
AU - Surkis, Julius
AU - Mohl, Murray
PY - 1983/3
Y1 - 1983/3
N2 - This paper describes a multi-period, chance constrained mathematical programming model to compute for each period, the firm's optimal debt to equity ratio and the optimal maturity distribution of its debt. The model assumes that the firm's objective is to maximize total value of the firm, and that the firm operates in a world of uncertainty, with corporate income taxes and bankruptcy costs. Finally, the actual coupon rate paid by the firm which is commensurate to the risk of default is endogenously determined by the model.
AB - This paper describes a multi-period, chance constrained mathematical programming model to compute for each period, the firm's optimal debt to equity ratio and the optimal maturity distribution of its debt. The model assumes that the firm's objective is to maximize total value of the firm, and that the firm operates in a world of uncertainty, with corporate income taxes and bankruptcy costs. Finally, the actual coupon rate paid by the firm which is commensurate to the risk of default is endogenously determined by the model.
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U2 - 10.1016/0378-4266(83)90055-9
DO - 10.1016/0378-4266(83)90055-9
M3 - Article
AN - SCOPUS:49049127437
SN - 0378-4266
VL - 7
SP - 45
EP - 67
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
IS - 1
ER -