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, Brusov–Filatova–Orekhova (BFO) theory

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lightbulbAbout this topic
The Brusov–Filatova–Orekhova (BFO) theory is a mathematical framework in the field of nonlinear dynamics that addresses the behavior of complex systems, particularly focusing on the stability and bifurcation phenomena in differential equations. It provides insights into the transition between different states of a system under varying parameters.
lightbulbAbout this topic
The Brusov–Filatova–Orekhova (BFO) theory is a mathematical framework in the field of nonlinear dynamics that addresses the behavior of complex systems, particularly focusing on the stability and bifurcation phenomena in differential equations. It provides insights into the transition between different states of a system under varying parameters.
We study the problem of the influence of debt financing on the effectiveness of the investment project within the theory of ModiglianiMiller and obtain quantitative results for the first time. The effectiveness of the investment project... more
The Brusov-Filatova-Orekhova (BFO) theory is generalized for the simultaneous account of variable company profit and advance tax on income payments. The generalized BFO formula for the WACC, has been derived. The dependence of WACC,... more
The recent rise in inflation in Europe, caused by the pandemic, the increase in prices for energy resources and the violation of the logistics of energy supplies, has led to a decrease in company income. This makes it relevant to study... more
Both main theories of capital cost and capital structure—the Brusov–Filatova–Orekhova (BFO) theory and its perpetuity limit, the Modigliani–Miller theory—consider the payments of tax on profit once per year, while in real economy these... more
During a couple years we have suggested a new approach to rating methodology of non-financial issuers, as well for project rating. The key factors of a new approach are: 1) The adequate use of discounting of financial flows virtually not... more
The first serious study (and first quantitative study) of influence of capital structure of the company on its indicators of activities was the work by Nobel Prize Winners Modigliani and Miller. Their theory has a lot of limitations. One... more
In the previous paper a new approach to rating methodology has been suggested. Key factors of a new approach were the following: 1) The adequate use of discounting of financial flows virtually not used in existing rating methodologies, 2)... more
In practice, profit tax payments are (1) made more frequently than annually and (2) can be made in advance. To study the influence of these two factors on the financial indicators of a company, we generalized the Brusov–Filatova–Orekhova... more
The modern capital cost and capital structure theory—the Brusov–Filatova–Orekhova (BFO) theory and its perpetuity limit, the Modigliani–Miller theory—describe the case of the payments of income tax at the end of the year. However, in... more
Paper is devoted to describe the new meaningful effects in capital structure theory, discovered within modern theory of capital cost and capital structure, created by Brusov, Filatova and Orekhova (BFO theory). These qualitatively new... more
Hopes of ending the financial crisis did not materialize. Recent events (the problems of the euro zone, the threat of default in the U.S., the collapse of the financial market after a reduction of the credit rating of the U.S., debt... more
Qualitatively new effect in corporative finance is discovered: decreasing of cost of equity k e with leverage L. This effect, which is absent in perpetuity Modigliani-Miller limit, takes place under account of finite lifetime of the... more
Within modern theory of capital structure and capital cost by Brusov-Filatova-Orekhova the analysis of wide known tradeoff theory has been made. It is shown that suggestion of risky debt financing (and growing credit rate near the... more
In this paper the influence of inflation on capital cost and capitalization of the company within modern theory of capital cost and capital structure-Brusov-Filatova-Orekhova theory (BFO theory) (Brusov et al. 2011, 2013; Filatova et al.,... more
In this paper we investigate the dependence of attracting capital cost on the time of life of company n at various leverage levels, at various values of capital costs with the aim of define of minimum cost of attracting capital. All... more
This paper investigates whether there is relationship between fluctuations of enterprise value or capitalization and related changes of WACC and cash flows. The study carried on the sample of some companies from the oil and gas sector,... more
This article explores the significance and additional capabilities of new principles for analyzing the capital structure and calculating the market value of a company. These principles are being developed as part of... more
Paper is devoted to describe the new meaningful effects in capital structure theory, discovered within modern theory of capital cost and capital structure, created by Brusov, Filatova and Orekhova (BFO theory). These qualitatively new... more
A few years ago we have discovered the effect of the "golden age" of company (Brusov et al. 2015): it was shown for the first time that valuation of the weighted average cost of capital, WACC, in the Modigliani-Miller theory (Modigliani... more
In the previous paper a new approach to rating methodology has been suggested. Key factors of a new approach were the following: 1) The adequate use of discounting of financial flows virtually not used in existing rating methodologies, 2)... more
The paper continues create a new approach to rating methodology: in addition to two papers, which have considered the creditworthiness of the non-finance issuers (Brusov et al., 2018c,d), we develop here a new approach to project rating.... more
Paper is devoted to study of the impact of the Central Bank key rate and commercial banks credit rates on creating and maintaining of a favorable investment climate in the country. Within the framework of modern investment models created... more
This paper analyzes the impact of the collateral value on the assessment of credit risk in the framework of the Advanced IRB approach and proves its impact on the LGD parameter and also provides a statistical analysis of the linear and... more
A few years ago we have discovered the effect of the "golden age" of company (Brusov et al. 2015): it was shown for the first time that valuation of the weighted average cost of capital, WACC, in the Modigliani-Miller theory (Modigliani... more
In this paper we develop for the first time a new approach to ratings of the investment projects of arbitrary durations, which could be applied to investments of any area of economy and in particular to energy projects.The ratings of... more
During a couple years we have suggested a new approach to rating methodology of non-financial issuers, as well for project rating. The key factors of a new approach are: 1) The adequate use of discounting of financial flows virtually not... more
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