The impact of different financing plans of the profit per share
10/2004 , p135..142
Author(s):
Monica PETCU
Keywords:
profit per share, indifference point to appeal to different financing resources, potential distribution profit per share at different indebtedness levels.
Abstract:
All the dissertations regarding the optimum financial structure are focalized on maximizing of the company value, generally of the shares as well, as a major objective in the share capital distribution. The financing structure has as objective the performance of an optimum balance among various financing sources, the decisions in this field having an determinative role on the average weighted cost of the share capital and on the company value. The determinism of this relation is given by the analysis fundament of the impact of different financing plans of the gain per share and, implicitly, of the share value. For the financing decision, a concern to be taken into account is the indifference point to appeal to different financing resources, respectively the increase of the gross surplus above the interests and taxes afferent to the new financial resources which should provide the same gain per share. Determining this indifference point makes possible the appraisal of the error risk regarding the financial decision. One aspect which must be pointed out in respect of considering the financing decision under the profit per share is that regarding the potential profit distribution per share at different indebtedness levels.
Download:
Back
|
|