Capital Structure Deviation from an Optimal Level: the Influence on the Value of Russian Companies

The aim of the present study is to investigate an influence of capital structure deviations from its optimal level on the value of Russian companies. The empirical part consists of two stages. The first step was to determine an optimal capital structure with the use of the minimum WACC method and regression equation model and calculate the deviation of a current debt-equity ratio from the optimum found. At the second stage an estimation of the effect of this deviation on company’s value was done. Data utilized was provided by International Laboratory of Intangible-driven Economy (IDLAB) of the HSE-Perm. The sample consisted of observations of Russian companies over the period 2010-2014. The analysis of results acquired by two methods of optimum calculation was done. So, it was revealed that capital structure deviations of Russian companies from their optimal levels do not negatively affect their value regardless a method of calculation of an optimum. Furthermore, the findings witnessed that behavior of Russian companies do not conforms the premise of the Capital Structure Theory.