Capital structure decisions : evaluating risk and uncertainty

274 Pages·2013·3.04 MB·English

by  Agarwal

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Praise for
Capital Structure Decisions
“Dr. Yamini Agarwal presents a logical and compact framework for corpo-
rate decisions on capital structure. Over the last decades there has been an
exponential growth in the number of instruments available to fi nance enter-
prises. The author introduces them clearly, while stressing the importance of
fundamental variables that measure performance. The interplay of economics,
accounting and regulatory issues is highlighted, making their complex relation-
ships accessible to the nonspecialist reader. Defi nitely a useful guide to evaluate
possible choices of capital structure.”
—Giovanni Barone-Adesi, Professor,
University of Lugano, Switzerland
“Concise and profound! Summaries, items, and defi nitions are numerous like
a good dictionary for capital structure; broadly based on H. A. Simon’s (1955)
behavioral decision-making processes, and pertinently and moderately on S. C.
Myers’s (1984); and empirically based on Yamini’s own long, vivid experiences
and education accumulation. I believe that this unique book will have readers
globally, and especially in India.”
—Hideyuki Kamiryo, Ph.D., Emeritus Professor,
Hiroshima Shudo University
“This is an important book, well written and presented and covering key top-
ics for fi nancial decision makers across a range of organisations. This includes
those working in large and medium-sized organisations, those managing dif-
ferent functions, and those offering business support and consultancy in these
situations. Those in smaller organisations will also fi nd value in this book,
enabling entrepreneurs and their teams to make better fi nancial decisions.
Rather than identifying the chief fi nancial offi cer with compliance, he or
she is seen as an active decision maker who enables value creation for stake-
holders through strategic decisions on a fi rm’s capital structure. The book
covers the need to understand the sources and types of funds available to
a fi rm within the context of innovation, risk, and uncertainty.  This includes a
review of the company’s traditional, interrelated, and multiple aims together
with the theoretical basis for decision making to enable a more entrepreneurial
approach to new processes of decision making.
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During the current global economic uncertainty, a text evaluating explor-
ing and identifying key stages to enable better fi nancial and business decision
making must be welcome. The need to fully understand risk in this process and
to see this as a way to create value responsibly is clearly indicated.  I recommend
this book to those ready to learn how best to create value for their fi rms and
to understand the implications and processes needed to take an enterprising
approach to the role of chief fi nancial offi cer.”
—Lynn Martin, Ph.D., Professor of Entrepreneurship,
ESRC; Third Sector Research Fellow, Elected Fellow, RSA;
Director, Centre for Enterprise; President, Institute of Small
Business and Entrepreneurship; board member,
Women’s Equity International; JMBS
“This book fi lls a gap in the existing literature by providing an integrated
comprehensive discussion of the issues of capital structure. It will be useful
to researchers, academics, practitioners, and students in the areas of fi nance,
fi nancial economics, and business. I strongly recommend this book to all readers
interested in capital structure.”
—Sardar M. N. Islam, Professor,
Victoria University, Australia
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Capital Structure
Decisions
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Founded in 1807, John Wiley & Sons is the oldest independent publishing
company in the United States. With offi ces in North America, Europe, Asia,
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and personal knowledge and understanding.
The Wiley Corporate F&A series provides information, tools, and insights to
corporate professionals responsible for issues affecting the profi tability of their
company, from accounting and fi nance to internal controls and performance
management.
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Capital Structure
Decisions
Evaluating Risk and Uncertainty
YAMINI AGARWAL
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Cover image: Cityscape image: © brett lamb/iStockphoto; Financial data image:
© ZoneCreative/iStockphoto
Cover design: John Wiley & Sons, Inc.
Copyright © 2013 by Yamini Agarwal.
Published by John Wiley & Sons Singapore Pte. Ltd.
1 Fusionopolis Walk, #07-01, Solaris South Tower, Singapore 138628
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system, or trans-
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their best efforts in preparing this book, they make no representations or warranties
with respect to the accuracy or completeness of the contents of this book and specifi cally
disclaim any implied warranties of merchantability or fi tness for a particular purpose. No
warranty may be created or extended by sales representatives or written sales materials.
The advice and strategies contained herein may not be suitable for your situation. You
should consult with a professional where appropriate. Neither the publisher nor the
author shall be liable for any damages arising herefrom.
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Library of Congress Cataloging-in-Publication Data
ISBN 978-1-118-20313-2 (Hardcover)
ISBN 978-1-118-20314-9 (ePDF)
ISBN 978-1-118-20315-6 (Mobi)
ISBN 978-1-118-20316-3 (ePub)
Typeset in 10/13pt, PhotinaMTStd by MPS Limited, Chennai, India
Printed in Singapore by Ho Printing (SG).
10 9 8 7 6 5 4 3 2 1
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I dedicate this book to my mother
Professor (Dr.) Manju Agarwal
with much appreciation .
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