Abstract

TORRES CORTES, Luisel Jonatan; VELAZQUEZ VADILLO, Fernando  and  TURNER BARRAGAN, Ernesto Henry. The Bellman’s Optimality Principle applied to corporate financial structure. Mexican case. Anál. econ. [online]. 2017, vol.32, n.81, pp.151-181. ISSN 2448-6655.

In search for a satisfactory answer to the question: How much debt is appropriate for a particular company? Researchers had development a whole wealth of literature that addresses the problem using different approaches. Research on financial structure and its impact on the corporate value of the companies began with the contributions of Franco Modigliani and Merton Miller which laid the foundations of the new approach of modern finance and has allowed the development of new regulations aimed at theories search for an optimal financial structure. This paper proposes a mathematical algorithm based on the Bellman’s Optimality Principle, which allows companies to determine the proportion of debt and optimal capital so that its weighted average cost of capital is minimized, which is equal to maximize its market value.

Keywords : Financial Structure; Capital Structure; Financial Optimization; Financial Leverage.