| Author: | Sandberg, C. M. Lewellen, W. G. Stanley, K. L. |
| Title: | Financial strategy : planning and managing the corporate leverage position. |
| Journal: | Strategic Management Journal
1987 : JAN-FEB, VOL. 8:1, p. 15-24 |
| Index terms: | CAPITAL STRUCTURE OF COMPANIES GEARING FINANCIAL PLANNING CORPORATE STRATEGY |
| Language: | eng |
| Abstract: | One of 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. It can assist the corporate manager in addressing the leverage decision in practice,particularly when the external view of the firm's situation is important for the decision. |
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