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Financial strategy: Planning and managing the corporate leverage position

Author

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  • Carl M. Sandberg
  • Wilbur G. Lewellen
  • Kenneth L. Stanley

Abstract

Among the important elements of a company's strategic plan is its decision about the degree of financial leverage it elects to imbed in its capital structure. A simple operational framework that can assist in framing that decision, which concentrates on the likelihood of being unable to meet fixed financial charges, is presented. The model is tested empirically, and support for its potential usefulness in the financial planning process is found.

Suggested Citation

  • Carl M. Sandberg & Wilbur G. Lewellen & Kenneth L. Stanley, 1987. "Financial strategy: Planning and managing the corporate leverage position," Strategic Management Journal, Wiley Blackwell, vol. 8(1), pages 15-24, January.
    • Handle: RePEc:bla:stratm:v:8:y:1987:i:1:p:15-24
    DOI: 10.1002/smj.4250080103
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    Cited by:

    1. Paolo Angelis & Fulvio Gismondi & Riccardo Ottaviani, 1994. "A non-parametric statistical model for the control of Italian insurance companies," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 17(1), pages 69-84, March.
    2. Mouzas, Stefanos & Bauer, Florian, 2022. "Rethinking business performance in global value chains," Journal of Business Research, Elsevier, vol. 144(C), pages 679-689.
    3. Marcelo Rabelo Henrique & Sandro Braz Silva & Ant?nio Saporito & S¨¦rgio Roberto da Silva, 2020. "Determinants of the Capital Structure of Companies Listed on the Stock Exchanges of Argentina, Brazil and Chile: An Empirical Analysis of the Period from 2007 to 2016," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(6), pages 1-18, June.

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