Abstract

Optimal-interest Financing of the Firm

At Ruhrkohle AG, an optimal-interest financing model has been developed, which covers the net financial requirements for the medium-term planning period with the most favourable net interest outlay. Simultaneously, important constraints (solvency at all times, upper debt limit, no transformation of maturities) are always met, but observance of balance-sheet indicators is not mandatory. The input parameters comprise the balance on the financing account resulting from management planning and the anticipated amount and structure of interest. The solution to the model is developed stepwise with the object of meeting a given volume of financial requirements with minimum interest expense. By varying the assumptions, it can be shown what financing strategies still give an optimal interest burden when adjusted to changed interest expectations or financial needs. Further development of the model in the direction of simultaneous optimization of investments and financing debts is conceivable.