Capital Structure Theory: Past, Present, Future

The purpose of this review is to analyze all existing theories the capital structure (with their advantages and disadvantages) in order understand aspects problem make correct management decisions practice. role that determination optimal allows company’s maximize capitalization company long-term goal function any company. examines state cost theory from middle last century, when first quantitative was created, present. two main theories, Modigliani–Miller (MM) Brusov–Filatova–Orekhova (BFO), are discussed analyzed, as well numerous modifications generalizations. Additionally, latest stage development structure, which began a couple years ago associated with adaptation (Brusov–Filatova–Orekhova Modigliani–Miller) establish practice companies. This generalization takes into account real conditions work It noted taking some effects present economic (such variable income, frequent payments tax on advance etc.) brings both closer, even theory, its many limitations, becomes more applicable However, it should be remembered only true for perpetual companies, while BFO valid companies age, point view, they never coincide.