Drahumirova A. H., Master’s Degree Student, graduate student of Finance and Credit Department, Petro Mohyla Black Sea National University, Mykolayiv, Ukraine

ORCID ID: 0000-0002-7100-7336
e-mail: dragumirova@yahoo.com

Analysis of Optimal Capital Structure of Technological Companies

Abstract. This article considers theoretical and practical concepts of optimal capital structure formation. Financial statements of Samsung Electronics Co., Ltd. during 2014-2018 have been analyzed. In particular, a lot of attention was paid to analyzing the liquidity and financial position of the firm. The capital structure of industry comparables has been considered to calculate unlevered beta. Cost of Equity, Cost of Debt and Equity Risk Premium for Samsung Electronics Co., Ltd. have been calculated to assess the optimality of the current capital structure. The current and optimal capital structures have been compared and explained.

Keywords: optimal capital structure; weighted average cost of capital; beta coefficient; equity; debt.

References:

1. Ardalan, K. (2017). Capital structure theory: Reconsidered. Research in International Business and Finance, 39, 696-710. DOI: 10.1016/j.ribaf.2015.11.010.
2. Brusov, P., Filatova, T., Orekhova, N., Kulik, V. & Weil, I. (2018). New Meaningful Effects in Modern Capital Structure Theory. Journal of Reviews on Global Economics, 7, 104-122. DOI: 10.6000/1929-7092.2018.07.08.
3. Mu, C., Wang, A., & Yang, J. (2017). Optimal capital structure with moral hazard. International Review of Economics & Finance, 48, 326-338. DOI: 10.1016/j.iref.2016.12.006.
4. Samsung expected to pay US$15b in taxes this year (2019). Retrieved from http://www.theinvestor.co.kr/view.php?ud=20190211000236.
5. Financial Highlights (n. d.). Retrieved from https://www.samsung.com/global/ir/financial-information/financial-valuation-snapshot/.
6. Consumer Electronics (n. d.). Retrieved from https://www.statista.com/markets/418/topic/485/consumer-electronics/.
7. Samsung Electronics Co. Ltd. Stock Price and News (n. d.). Retrieved from https://quotes.wsj.com/KR/XKRX/005930?mod=searchresults_companyquotes
8. Samsung Electronics Overview (n. d.). Retrieved from https://finance.yahoo.com/quote/005930.KS?p=005930.KS&.tsrc=fin-srch.
9. Department of the Treasury (2019). Retrieved from https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield.
10. Equity Risk Premiums by Country (n.d.). Retrieved from http://people.stern.nyu.edu/adamodar/.
11. Country Default Spreads and Risk Premiums (2019). Retrieved from http://pages.stern.nyu.edu/~adamodar/ New_Home_Page/datafile/ctryprem.htm.