Identifying the optimal capital structure for a second stage growth company using mezzanine financing

This paper demonstrates how mezzanine financing can be used to minimise the weighted average cost of capital for a second stage growth firm waiting to obtain equity capital from an IPO. A model is provided that allows entrepreneurs to fit their available mezzanine financing cost structure to a continuous function to determine the appropriate amount of mezzanine financing for planning purposes.

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Year of publication:	2003
Authors:	Clark, John M. ; Anderson, Randy I.
Published in:	Global Business and Economics Review. - Inderscience Enterprises Ltd, ISSN 1097-4954. - Vol. 5.2003, 1, p. 100-110
Publisher:	Inderscience Enterprises Ltd
Subject:	mezzanine financing \| second stage growth firm \| weighted average cost of capital \| entrepreneurs \| cost structure \| initial public offerings \| IPO

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

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