The traditional theory and the theory of Modigliani - Miller capital structure

The paper modeled the optimal proportion of long-term debt in total balance sheet of the company through research and comparison of the traditional theory of capital structure and the theory of Modigliani - Miller. The authors derived the optimal value of the ratio of maximum long-term debt to total balance sheet of energy companies, which yields the greatest return on its equity. We show the usefulness of the resulting optimal value of the capital structure in calculating the average cost of capital for discounting cash flows using net operating flow for the constant phase of cyclical development of the economy estimated industry.