This monograph is devoted to the modern theory of capital cost and capital structure and its application to the real economy. In particular, it presents a possible explanation to the causes of global financial crisis. The authors of the book modify the theory of Nobel Prize winners Modigliani and Miller to describe an alternative theory of capital cost and capital structure that can be applied to corporations with arbitrary lifetime and investment projects with arbitrary duration. The authors illustrate their theory with examples from corporate practice and develop investment models that can be applied by companies in their financial operations.
Part I: Corporate Finance: Introduction.- Capital Structure:
ModiglianiMiller Theory.- Modern Theory of Capital Cost and Capital
Structure: Brusov-Filatova-Orekhova Theory (BFO Theory).- Bankruptcy of the
Famous Tradeoff Theory.- New Mechanism of Formation of the Company Optimal
Capital Structure, Different from Suggested by Trade Off Theory.- The Global
Causes of Global Financial Crisis.- The Role of Taxing and Leverage in
Evaluation of Capital Cost and Capitalization of the Company.- A
Qualitatively New Effect in Corporate Finance: Abnormal Dependence of Equity
Cost of Company on Leverage.- Inflation in BrusovFilatovaOrekhova Theory
and in Its Perpetuity Limit Modigliani Miller Theory.- Part II:
Investments: A Portfolio of Two Securities.- Investment Models with Debt
Repayment at the End of the Project and Their Application.- Influence of Debt
Financing on the Efficiency of Investment Projects: The Analysis of
Efficiency of Investment Projects within the Perpetuity (ModiglianiMiller)
Approximation.- The Analysis of the Exploration of Efficiency of Investment
Projects of Arbitrary Duration (within BrusovFilatovaOrekhova Theory).-
Investment Models with Uniform Debt Repayment and Their Application.- Whether
It Is Possible to Increase Taxing and Conserve a Good Investment Climate in
the Country?- Whether It Is Possible to Increase the Investment Efficiency,
Increasing Tax on Profit Rate? An Abnormal Influence of Growth of Tax on
Profit Rate on the Efficiency of the Investment.- Optimizing of the
Investment Structure of the Telecommunication Sector Company.- The Golden Age
of the Company (Three Colors of Company's Time).- Conclusion.
