Downloads: 180 | Views: 441 | Weekly Hits: ⮙1 | Monthly Hits: ⮙1
Case Studies | Financial Engineering | Indonesia | Volume 6 Issue 3, March 2017 | Popularity: 6.6 / 10
Capital Structure Optimization of Staging Development Toll Road Project in Indonesia
Gibranius Berutu, Muhammad Firdaus, Hendro Sasongko
Abstract: The characteristics of toll road project investment are lengthy payback and high upfront capital requirements, therefore, its funded with mixed debt-equity capital. The government Indonesia was invite investors to participate road infrastructure development, nevertheless financial viability of investment packages were not interesting enough for certain number of promoted projects. Staged development divided road into segments and it should be an alternative to generate traffic demand for assign minimum viability threshold. Each segment constructing schedule should not delayed to avoid cost escalation that borne to the next development. On-time construction start highly depend on traffic demand projection accuracy. The last constructed segment, would have shortest independent concession. Government own the authority to determine initial tariff and its adjustment, therefore, investors have no power to set price. Both internal and external condition of the industry must thoroughly examined because there was a time arrangement for staging investment. Optimal capital structure analysis was done to calculate minimum equity level and maximize profitability. Either interest rate or equity cost were modeled as the function of DER, where exact solution found by a trial-error approach. Simulation output was reveal that late start of construction schedule would escalate the investment cost and decrease viability of project.
Keywords: DER, optimum capital structure, toll road project
Edition: Volume 6 Issue 3, March 2017
Pages: 955 - 961
Make Sure to Disable the Pop-Up Blocker of Web Browser
Similar Articles
Downloads: 2 | Weekly Hits: ⮙1 | Monthly Hits: ⮙1
Research Paper, Financial Engineering, India, Volume 13 Issue 4, April 2024
Pages: 1776 - 1790Effect of Varying Underlying Data of Exotic Options (Asian and Lookback) Using Monte Carlo Scheme
Aumkar Wagle
Downloads: 2 | Weekly Hits: ⮙1 | Monthly Hits: ⮙1
Technical Report, Financial Engineering, India, Volume 13 Issue 4, April 2024
Pages: 1932 - 1943Random Forest Classifier to Predict Financial Data
Aumkar Wagle
Downloads: 5 | Weekly Hits: ⮙1 | Monthly Hits: ⮙1
Research Paper, Financial Engineering, India, Volume 12 Issue 7, July 2023
Pages: 987 - 991Impact of FinTech on Capital Markets
Rangapriya Saivasan, Dr Madhavi Lokhande
Downloads: 5 | Weekly Hits: ⮙1 | Monthly Hits: ⮙1
Research Paper, Financial Engineering, India, Volume 13 Issue 4, April 2024
Pages: 1944 - 1972Deep Learning for Financial Time Series using Long Short-Term Memory Model
Aumkar Wagle
Downloads: 7 | Weekly Hits: ⮙2 | Monthly Hits: ⮙3
Analysis Study Research Paper, Financial Engineering, United States of America, Volume 11 Issue 3, March 2022
Pages: 1609 - 1613The Use of the Blockchain Technology in the Banking Industry and Its Impact on the Financial System
Ardhendu Sekhar Nanda