Optimal Capital Structure: The case of Russian Companies

Abstract

Research goal: to provide Russian metal producers with an approach of defining target debt ratio for deciding on financing policy Research objectives: • To review existing capital structure theories • To analyze Russian metallurgical market • To collect statistical data • To generate pseudo-companies based on statistical data of existing firms Results: Marginal cost curves and marginal tax benefit curves were estimated with regards to firm-specific characteristics, giving Russian metal producers an opportunity to use estimated functions for making financing decisions by setting a target debt-to-equity ratio and estimati3ng costs of operating not in the equilibrium point.