Influence of debt financing on the effectiveness of the finite duration investment project
The problem of the influence of debt financing on the effectiveness of the arbitrary duration investment project is studied and quantitative results are obtained for the first time. The effectiveness of the investment project is considered from two perspectives: the owners of equity and debt and equity holders only. It was shown, that <italic>NPV</italic> practically always decreases with leverage in case of a constant value of equity, and the maximum leverage level, at which the project is still effective (<italic>NPV</italic> > 0), was found. In case of a constant value of the total invested capital it is possible an increase of <italic>NPV</italic> with leverage as well as its decrease, depending on the relation between the parameters of the project.
Year of publication: |
2012
|
---|---|
Authors: | Brusov, Peter ; Filatova, Tatiana ; Eskindarov, Mukhadin ; Brusov, Pavel ; Orehova, Natali ; Brusova, Anastasia |
Published in: |
Applied Financial Economics. - Taylor & Francis Journals, ISSN 0960-3107. - Vol. 22.2012, 13, p. 1043-1052
|
Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Influence of debt financing on the effectiveness of the finite duration investment project
Brusov, Peter, (2012)
-
Influence of debt financing on the effectiveness of the finite duration investment project
Brusov, Petr N., (2012)
-
Brusov, Petr N., (2011)
- More ...