The algorithms for the environmental finance based on adjusted present value models

¹ Peter the Great St. Petersburg Polytechnic University, 29, Polytechnicheskaya str., 195251, St. Petersburg, Russia
² Institute of Regional Economic Problems of Russian Academy of Science, 38, Serpukhov str., 190013, St. Petersburg, Russia
³ Saint-Petersburg State University of Economics, 21, Sadovaya str., 191023, St. Petersburg, Russia
⁴ South West State University, 94, 50 let Oktiabria str., 305040, Kursk, Russia

^* Corresponding author: plotnikov_2000@mail.ru

Abstract

The article discusses the direction of modification of methods for calculating the optimal capital structure based on compromise theories and, in particular, the method of adjusted cost, which involves taking into account the benefits and costs of debt financing. The tools presented in the article can be used in the practice of environmental financing. The algorithm for calculating the value of the enterprise based on free cash flow is considered, which allows choosing the capital structure from the condition of maximizing the value of the enterprise. The considered theoretical models do not give a complete picture of how to take into account the effect of the tax shield and the possible costs of financial difficulties in making practical decisions related to capital structure. Alternative approaches to the calculation of individual elements and parameters of the method, such as the probability of bankruptcy, are offered. In particular, it was offered to consider logistic regression models for assessing the risk of bankruptcy, as well as to modify the methodology for calculating bankruptcy risk based on a credit rating, taking into account the dependence of the cost of borrowed capital on the level of financial leverage in the enterprise. Further, it is recommended to use a weighted average for the probability of risk of bankruptcy, as well as to carry out adjustment of the value of bankruptcy costs, taking into account the weighted average of the assessment.