Identifying the optimal capital structure for a second stage growth company using mezzanine financing
by John M. Clark, Randy I. Anderson
Global Business and Economics Review (GBER), Vol. 5, No. 1, 2003

Abstract: 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.

Online publication date: Mon, 07-Feb-2005

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