Influence of capital structure of e-payment institutions for capital costs and leverages (activity/financial)

Abstract

Funds assigned for the start of the company activity are referred to as the capital. The structure of the capital of the company depends on the resources of activity financing. Financing resources are possible both from the funds of the founder(-s) of the company and from the borrowed funds. The balance between equity and borrowed capital is very important, because it may affect the continuity of the activity of the company. The borrowed capital is an investment used for the development of the activity. The form of which can be loans or securities. Cost size depends on the structure of the capital. Costs of borrowed capital consist of paid interest for the obligations, different credits and etc. Costs of equity are formed by paid dividends. Measures are applied for the optimal formation of the structure of the capital. One of the main measures are activity and financial leverages. The aim of the study is to assess the impact of the capital structure of electronic payment institutions on capital costs, operating and financial leverage. To achieve this goal, it is necessary to evaluate the individual components of the company’s capital, calculate the total cost of the company’s capital, since it shows the average risk of all available assets, financial leverage – the ratio of borrowed and equity capital and operating leverage – the ratio of operating expenses and variable income. The value of the price of capital is important because it influences the market price of a company. In practice, it is difficult or even impossible to calculate the cost of capital, since sources of financing have different values. During assessment of type and demand of the investments, it is necessary to take into account the contemporary innovations of financial technologies proposed in the market. It is relevant to use financial technologies to form the structure of the capital. Whereas, it is more flexible and effective method to perform the activity of the company by using contemporary information and communication measures. Today, in order to participate in financial markets, there is no need to step a foot off your home, because trade of securities and financial technologies are fully computerized and even available via phone, in order to improve the provision of the services. These measures are e-banking, e-trade systems, e-payments and etc. E-technologies eliminate restrictions of time and location. Small companies have an opportunity to expand despite of the size of their capital, the business is developed at the lowest cost.