InterJournal Complex Systems, 552
Status: Accepted
Manuscript Number: [552]
Submission Date: 20516
Revised On: 20516
Auto-adaptive Models for Estimating Romanian Firms' Cost of Equity
Author(s): Irina Manolescu ,Claudia Gabriela Ciorascu

Subject(s): CX.13, CX.16, CX.35, CX.44, CX.66

Category: Article

Abstract:

This paper analyzis the mutations of the Romanian firms capital structures and the relations with the cost of equity capital. The validity of leverage effect of capital structure over financial return is also tested. We consider in this analysis the public data of more than one hundred Romanian firms listed at Bucharest Stock Market and on Rasdaq, between 1997 and 2000. Because of their adaptation to the specific of the input data, the neural models can be successfully used in real problems with large data sets. We are studying the quality of this approach in the case of estimating firms' cost of equity. This also defines the pre-requisites for considering new instances of the problem: share valuation, investment decision-making, etc. The neural system designed for approximating the input data will be generated automatically by an evolutionary method based on genetic procedures. The supervised learning method used for training the neural network consists in a powerful combination between evolutionary techniques and back-propagation algorithm.

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