Title: An analytical model for the evaluation of the capital formation strategies in the Russian oil and gas companies

Authors: Yusuf J. Ugras; Murad Alimuradov; Daria Gavrilina; Alena Berdiugina

Addresses: Accounting Department, La Salle University, Philadelphia, USA ' Department of Economic and Financial Strategy, Lomonosov Moscow State University, Moscow, Russia ' Department of Economic and Financial Strategy, Lomonosov Moscow State University, Moscow, Russia ' Department of Economic and Financial Strategy, Lomonosov Moscow State University, Moscow, Russia

Abstract: This paper discusses approaches for developing a capital structure optimisation strategy to maximise the market value of a company and enhance its financial sustainability. The weighted average cost of capital minimisation method was chosen to evaluate the capital formation strategies of the three largest Russian oil and gas companies which play a pivotal role in the Russian economy. After developing an optimal ratio of debt-to-equity for these three firms, practical recommendations are proposed on achieving an optimal mix of capital structure strategy. The study arrives at three different capital structure strategies for these three companies based on the utilised model.

Keywords: capital structure; strategy; equity; loan capital; optimisation; financial leverage; oil and gas companies; corporate venture capital.

DOI: 10.1504/IJMDM.2021.118551

International Journal of Management and Decision Making, 2021 Vol.20 No.4, pp.392 - 411

Received: 04 Oct 2020
Accepted: 11 Nov 2020
Published online: 28 Oct 2021 *

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