Capital Structure in the Modern World: The Fundamentals of Capital Structure Management and Financing Decisions

This book focuses on microeconomic foundations of capital structure theory. It combines theoretical results with a large number of examples, exercises and applications. The book examines fundamental ideas in capital structure management, some of which are still not very well understood in the business community, such as Modigliani and Miller’s irrelevance result, trade-off theory, pecking-order theory, asset substitution, credit rationing and debt overhang. The second edition also covers capital structure issues related to recent developments in financial technology including crowdfunding and token issues and discusses significant differences between these innovative ways of firm financing compared to traditional debt and equity. Chapters also discuss the ways in which financial economists were forced to look critically at capital structure after the financial crisis of 2007-2009 and the COVID-19 pandemic, as the problems faced by many companies stemmed from their financing policies. Further the book analyzes links between capital structure and firm’s performance, corporate governance, firm’s strategy and flexibility, and covers such topics as life cycle approach to capital structure management, capital structure of small and start-up companies, corporate financing versus project financing and examples of optimal capital structure analyses for different companies. This comprehensive guide to capital structure theory will be of interest to all students, academics and practitioners seeking to understand this fast-developing and critical area.

Anton Miglo is Professor of Finance at Toronto School of Finance, Canada. He obtained his Candidate of Science Degree from Saint-Petersburg State University in 1998 and PhD with excellence in economics (concentration in finance) from the University of Quebec in Montreal (Canada) in 2005. During his studies, Professor Miglo was awarded prestigious scholarships from the Canadian Council of Social Science Research and Montreal Institute of Financial Mathematics. Over the course of his career, Professor Miglo has taught numerous finance courses including capital structure management related courses in leading universities in Europe and North America including the University of Glasgow, the University of East Anglia and the University of Guelph. The courses include Theory of Finance, Financial Management, Entrepreneurial Finance, Advanced Topics in Finance, Investments, Finance with Excel, Financing Strategies and Corporate Governance and Crowdfunding and Token Issues. He is the author of more than 40 academic publications, including articles in Small Business Economics, North American Journal of Finance and Economics, The Journal of Economics and Business, The Journal of Economics, Manchester School, and Quarterly Journal of Economics and Finance; five book chapters; and numerous conference proceedings. His area of expertise includes corporate finance and financial economics.