In addition to identifying an optimal capital structure
to help minimise working capital needs and preserve liquidity, a relationship with your suppliers, bankers and customers can bridge any funding deficits and help streamline your payments.
The company added that it is working hard to restore normal good corporate governance in Turkcell and with shareholder representation on the board, so that it can achieve an optimal capital structure
In other words, how would an optimal capital structure
be identified and how can it be known?
MUHAMMAD AZAM KHAN: The basic goal of every organization is to set optimal capital structure
that increase the firms value in terms of performance, increasing the share price and having the minimum cost of capital that we have to pay to our borrowers from which we gave our debt and return back that should gave to our equity holders.
and if Vy is equal to zero at the optimal capital structure
, then the following equation yields the sensitivity of bankruptcy probability to level of debt payments :
Ross (1977) developed signalling theory which is based on the concept of asymmetric information and its impact in determining the optimal capital structure
However, these empirical studies failed to assign a definitive value as far as optimal capital structure
is concerned (Gitman and Zutter, 2010).
Most discussions in the finance literature about capital structure decisions center on the notion of optimal capital structure
or target capital structure.
Many empirical and theoretical studies have explored different factors based on cross sectional time series data to seek the firms' optimal capital structure
Our operations across the GCC region have been instrumental in driving bottom-line growth, while our commitment to achieving an optimal capital structure
has increased earnings per share by 19 per cent," Waleed Al Mokarrab Al Muhairi, chairman of Tabreed, said.
While these studies examine the determinants of the optimal capital structure
, the theoretical impact of capital structure on wealth transfer from debtholders to stockholders, the impact of capital structure on stock prices, and the agency costs related to capital structure, they don't address the research question in this paper.
This would allow issuers to select the optimal capital structure
based on current market conditions and investor preferences rather than a "one-size-fits-all" approach.