SEARCH
 

Search

 

1 - 10 21
 | . | 1 2 3 | . |


Incorporation of rating parameters into the perpetuity range of the BrusovFilatovaOrekhova modern theory of capital structure

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation ( tvfilatova@fa.ru )

Orekhova N.P. Southern Federal University, Rostov-on-Don, Russian Federation ( fet_mir@bk.ru )

Kulik V.L. Financial University under Government of Russian Federation, Moscow, Russian Federation ( venya.kulik@mail.ru )

Journal: Finance and credit, #40, 2017

Importance The research focuses on the existing systems of rating, respective methodologies and weaknesses of these methods.
Objectives We modify the methodology embedded into the existing rating systems and devise a brand new approach based on the appropriate application to discounted cash flows, discount of rating parameters, correct assessment of discount rates in line with financial ratios.
Methods The research deals with the perpetuity range of the BrusovFilatovaOrekhova modern theory of capital cost and capital structure. We also rely upon the modified theory for rating purposes and ranking coefficients.
Results We modify the methodology of the existing rating systems and devise an absolutely new approach to it.
Conclusions and Relevance Modifying the rating methodology, we make our own assessments more accurate and unbiased. Using the toolkit of the advanced theories, we reach new horizons of the rating practice, since it enables the rating segment to predominantly use quantitative methods. The proposed approach should be applied by all rating agencies in assessing the creditworthiness of issuers.


Is it possible to increase investment efficiency through increasing the rate of corporate profit tax?

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. Universities Research Consortium in Russian South, Rostov-on-Don, Russian Federation ( Natali_Orehova@Bk.Ru )

Kulik V.L. Financial University under Government of Russian Federation, Moscow, Russian Federation ( venya.kulik@mail.ru )

Journal: Finance and credit, #19, 2015

Importance The current condition of the Russian economy enhances the relevance of the issue of corporate profit tax impact on a company's investment activity.
     Objectives The paper examines the effect of changes in the rate of corporate profit tax on investment efficiency, and aims at detecting the anomalies of the influence.
     Methods We made all calculations within the modern theory of capital cost and capital structure developed by Brusov, Filatova, and Orekhova, and under our unique modern investment models. We consider the matter from the viewpoint of equity capital owners, and equity and debt capital owners. In the analysis of long-term projects, we use equity value or WACC calculated by Modigliani and Miller, as a discount rate. When analyzing projects with arbitrary duration, the discount rate is the cost of capital obtained under the Brusov - Filatova - Orekhova theory.
     Results We show that in both cases, i.e. in long-term projects and projects with optional duration, an increase in the rate of corporate profit tax changes the nature of the NPV dependence on leverage at some value of t* : there is a transition from the decreasing function NPV(L), when t < t* , to the increasing function NPV(L), when t > t*b . At higher leverage levels, we observe a qualitatively new effect in investments, i.e. the growth of investment efficiency as the rate of corporate profit tax goes up.
     Conclusions and Relevance
The discovered qualitatively new effects in investments are very important from a theoretical viewpoint, and may lead to qualitatively new managerial decisions on investment optimization.


Three colors of company's time (the optimal period in company's development)

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. Higher School of Business of Southern Federal University, Rostov-on-Don, Russian Federation ( fet_mir@bk.ru )

Kulik V.L. Financial University under Government of Russian Federation, Moscow, Russian Federation ( venya.kulik@mail.ru )

Journal: Finance and credit, #33, 2015

Importance We investigate the dependence of the cost of capital on company's lifetime at various levels of leverage and different capital values.
     Objectives The aim of the study is to define minimum cost of capital (WACC), depending on the level of debt financing and cost of capital (equity and borrowed funds).
     Methods
All calculations have been done within the modern theory of cost of capital and structure of capital by Brusov - Filatova - Orekhova, which replaced the now outdated Modigliani - Miller theory, and which is applicable to companies with arbitrary lifetime. We investigate the dependence of WACC on company's lifetime at various leverage levels and various cost of equity and debt capital.
     Results The paper shows, for the first time, that the valuation of WACC in the Modigliani-Miller theory is not minimal, and the valuation of company's capitalization is not maximal. At some stage of company development, its WACC turns out to be lower, and company capitalization, accordingly, greater than the value under the Modigliani-Miller theory. As the 'golden age' of a company depends on the costs of capital, the control over the costs (for example, by modifying the value of dividend payments, that changes the value of equity), company management may expand this age.
     Conclusions We conclude that previous understanding of the results of the Modigliani - Miller theory is incorrect. We discuss the use of open effects in Russian practice, which is especially important under current economic situation.


Influence of taxation on the optimal investment structure of a telecommunication sector company

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. Institute of Management, Business and Law, Rostov-on-Don, Russian Federation ( Natali_Orehova@Bk.Ru )

Brusova A.P. Financial University under Government of Russian Federation, Moscow, Russian Federation ( mfilatova@fa.ru )

Kulik V.L. Financial University under Government of Russian Federation, Moscow, Russian Federation ( venya.kulik@mail.ru )

Journal: Finance and credit, #11, 2015

Importance Given the condition of the Russian economy, the problem of influence of the income tax rate of a company on its investment activity becomes quite relevant.
     Objectives This is the third article in a series of articles dealing with the analysis of operations of Nastcom Plus, a telecommunication sector company. We examined the effects of changes in the income tax rates, both upwards and downwards, on the optimal structure of investments with different periods of project life.
     Methods As in previous articles, we made all calculations under the modern theory of cost and structure of capital developed by Brusov, Filatova, and Orekhova. We analyzed investments using the formula, which we developed earlier for the case of constant value of equity capital. We make the analysis from the point of view of the equity capital owners.
     Results The study shows that an increase in the income tax rates leads to degradation (decrease) of NPV, where degradation reduces, if project duration increases. In particular, for a 5-year project (amortization period), if income tax rate increases by 1%, NPV decreases by 1.5%-2.34% in different years. Though a change in the income tax rate has an impact on the optimum (the optimum for 2-year and 10-year projects changes in 2012, and for a five-year project in 2012 (by 0.5-1 (in leverage units)), nevertheless, the position of the optimum is rather stable.
     Conclusions and Relevance We conclude that under conditions of sanctions and stagnation of the economy, development of methods for assessing the effects of income tax rate of an organization on its investment activities plays an important role.


Modern investment models with uniform debt repayment and their application

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. Institute of Management, Business and Law, Rostov-on-Don, Russian Federation ( Natali_Orehova@Bk.Ru )

Kulik V.L. Financial University under Government of Russian Federation, Moscow, Russian Federation ( venya.kulik@mail.ru )

Journal: Finance and credit, #9, 2015

Earlier, the authors created investment models with debt repayment at the end of project. The models proved to be successful in the analysis of efficiency of real investment projects. In this work, the authors have created new investment models with uniform repayment of debt over the project life. The new models adequately describe real investment projects. Specifically, under these models it is possible to analyze the dependence of investment projects' efficiency on debt financing and taxation. The authors consider the issue as part of the modern theory of capital cost and structure, which have been developed by P.N. Brusov, T.V. Filatova and N.P. Orekhova, and within the perpetuity limit. The authors developed the method of assessing the impact of income tax rate on the net present value (NPV). The study shows that growing income tax rate causes a decrease in the project NPV, and enables to estimate the percentage of the decrease. The possibility of such estimations is unique. It turns out that the effect of taxation on NPV depends on the level of leverage: if it increases, the impact of changes in the income tax rate is significantly reduced. This applies both to an increase and a decrease of the rate; meanwhile, both these options have practical value in the current economic conditions. The authors have investigated how the income tax rate influences the optimal investment structure. Under the existing (20%) and higher (25%) rate of income tax, there is an optimum of NPV dependence on leverage. Investors should consider the structure of invested capital: they will be able without special effort to gain in NPV (sometimes very significant) only by changing this structure.


Possibilities to increase taxes and maintain favorable investment climate in the country

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. Institute of Management, Business and Law, Rostov-on-Don, Russian Federation ( Natali_Orehova@Bk.Ru )

Goncharenko L.I. Financial University under Government of Russian Federation, Moscow, Russian Federation ( goncharenko@yandex.ru )

Anisimov S.A. Financial University under Government of Russian Federation, Moscow, Russian Federation ( sa164@yandex.ru )

Rudomanenko V.P. Financial University under Government of Russian Federation, Moscow, Russian Federation ( rudoman1993@gmail.com )

Journal: Finance and credit, #45, 2014

Importance In the present economic conditions (economic stagnation, sanctions of the West) the State mobilizes all possible resources to stabilize economic situation in the country (income tax rate increase, increase in the retirement age, etc.). The article addresses one of the aspects of possible mobilization of resources, i.e. an increase in income tax rates. This topic has always been important, and in the current circumstances its relevance has increased dramatically.
     Objectives The study deals with the aspects of possible resource mobilization, i.e. an increase in income tax rates. We are planning a series of articles about impact of taxation on the country's economy. In these articles we intend to cover two global themes, i.e. effects of taxation on production and investment efficiency.
     Methods We conducted the study of the effects of taxation on long-term investment efficiency within the framework of investment models created by P. Brusov, T. Filatova, and N. Orekhova.
     Results An increase in income tax rate results in reduction of the net present value of a project on the one hand, and in decreased sensitivity of an investment project's efficiency to the leverage level on the other hand. At high leverage levels, the effect of income tax rate growth on the efficiency of investment projects reduces significantly. It is possible to differentiate taxation depending on the level of borrowed funds in investment projects of a company: to apply increased income tax rate to projects with high leverage. We have demonstrated a possibility to obtain quantitative estimates for projects with different cost of equity capital and debt capital in the event of a free structure of invested capital. The effect of taxation on investment program efficiency depends on the level of leverage, project duration, cost of own funds, the level of return on investment and methods of building the invested capital.
     Conclusions and Relevance We conclude that the effect of taxation significantly depends on the level of debt financing of investment projects of companies, and decreases if leverage level is growing. The regulating authority should take into account the obtained results when setting income tax rates.


40(760) - 2017 October

Journal: Finance and credit, #,


The role of the evaluation of financial parameters of the company activity in reduction of the possibility of financial crisis

Brusov P.N. Doctor of Economics, professor of department Applied mathematics, Financial University under the Government of Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. PhD in Economics, professor of department Financial management, Financial University under the Government of Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. PhD of Physical and Mathematical Sciences, leading scientist, Southern Federal University ( Natali_orehova@bk.ru )

Bruso P.P. PhD of Physical and Mathematical Sciences, leading scientist, Southern Federal University ( ppb@bmail.ru )

Brusova A.P. Head of the department of financial settlements and risks of MTS ( flowerik1@yandex.ru )

Journal: Finance and credit, #1, 2012

The financial crisis has deepened, affecting new areas and taking on a systemic character. The deep analysis of its general, systemic causes is needed. The recent results in this area by scientists of the Finance University under the Russian Government are presented in the article.


The mechanism of formation of optimal capital structure -nontraditional for the compromise theory

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. Institute of Management, Business and Law, Rostov on Don, Russian Federation ( Natali_Orehova@Bk.Ru )

Journal: Finance and credit, #21, 2014

The article considers the issue of searches of other mechanisms of formation of optimum capital structure in the conditions of insolvency of the known classical compromise theory. The author offers the real mechanisms connected to decrease of loan cost with leverage which is defined (in some range of leverage levels) by growth of loans volume. This mechanism is absent in Modigliani - Miller's perpetuity limit in the modified version of the theory and exists within more general modern theory of cost and structure of the company capital of Brusov - Filatova-Orekhova (BFO theory).


Analysis of investment projects for owners of equity in approximation of Modigliani Miller

Brusov P.N. Doctor of Physical and Mathematical Sciences, Professor of Department Applied Mathematics, the Financial University under the Government of Russian Federation ( pnb1983@yahoo.com )

Filatova T.V. PhD in Economics, Professor of Department Financial Management, the Financial University under the Government of Russian Federation ( mfilatova@fa.ru )

Orekhova N.P. PhD of Physical and Mathematical Sciences, Head of Department Financial and Economical Technology, the Institute of Business, Management and Law, Rostov n/D ( Natali_Orehova@Bk.Ru )

Brusov P.P. PhD of Physical and Mathematical Sciences, Leading Scientist, the Southern Federal University ( ppb@bmail.ru )

Brusova A.P. Head of Department Financial Settlements and Risks, JSC MTS ( flowerik1@yandex.ru )

Dolgov D.M. Student, Department Financial Management, the Financial University under the Government of the Russian Federation ( infoddisney@gmail.com )

Journal: Financial Analytics: Science and Experience, #6, 2013

The numerical analysis of the models of an assessment of dependence of efficiency of investments developed from loan financing is carried out. Consideration is presented with the point of view of owners in Modelyani's approach Miller.


1 - 10 21
 | . | 1 2 3 | . |


 |