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Financial Leverage: Classic And Modern Approach-Case Study On The Companies Listed On Bucharest Stock Exchange, Equipment Section

Author

Listed:
  • Cristina Maria Triandafil

    (Academy of Economic Studies, Bucharest)

  • Petre Brezeanu

    (Academy of Economic Studies, Bucharest)

  • Catalin Huidumac

    (Academy of Economic Studies, Bucharest)

Abstract

This paper focuses on highlighting out the way financial leverage has been approached, both from classic and modern perspective. Literature on financial leverage is reviewed in order to get a deeper insight on the way theories, concepts and mentalities have evolved. From the classic neutral theory according to which the value of the company is independent from its capital structure till the modern one which permits the company to support its growth potential by resorting to external financial resources, leverage was considered to be a key-element of the corporate financial management, especially in the context of the corporate governance mechanisms implementation. The last section contains a case-study made on the equipments section companies listed on Bucharest Stock Exchange in terms of leverage evolution.

Suggested Citation

  • Cristina Maria Triandafil & Petre Brezeanu & Catalin Huidumac, 2007. "Financial Leverage: Classic And Modern Approach-Case Study On The Companies Listed On Bucharest Stock Exchange, Equipment Section," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 11(11(516)(s), pages 339-346, November.
    • Handle: RePEc:agr:journl:v:11(516)(supplement)(vol2):y:2007:i:11(516)(supplement)(vol2):p:339-346
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