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Title: :  STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING
PaperId: :  24829
Published in:   International Journal Of Advance Research And Innovative Ideas In Education
Publisher:   IJARIIE
e-ISSN:   2395-4396
Volume/Issue:    Volume 3 Issue 1 2017
DUI:    16.0415/IJARIIE-24829
Licence: :   IJARIIE is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Author NameAuthor Institute
M V ShruthiDepartment of Commerce Hemagangotri PG Centre Affiliated to University of Mysore, Hassan – 573202

Abstract

Commerce and Management
Strategic Corporate Debt Management, Low-Interest-Rate Environment, Refinancing Strategies, Leverage and Financial Risk, Investment Decision-Making Capital Structure Theory, Monetary Policy Impact
This conceptual research paper delves into the multifaceted dynamics of strategic corporate debt management in a sustained low-interest-rate environment exploring how corporations have adapted their refinancing strategies to capitalize on historically low borrowing costs by extending maturities, reducing interest expenses, and enhancing liquidity positions, while simultaneously navigating the complexities of increased leverage, which, although it allows firms to exploit financial arbitrage opportunities and pursue value-accretive investments, also imposes heightened risks related to financial distress and potential over-leverage, particularly in scenarios where interest rates may eventually normalize or where economic conditions might deteriorate, thereby necessitating a careful balance between debt accumulation and risk management; further, this research examines the implications of these corporate financial strategies on investment decision-making, as firms operating in such a low-interest environment may exhibit a preference for debt-financed capital expenditures over equity financing, leading to significant shifts in capital structure and asset allocation, with potential repercussions for long-term corporate governance and shareholder value, especially as firms may prioritize projects with quicker payback periods to hedge against future interest rate hikes, which in turn influences the overall investment landscape, driving trends in mergers and acquisitions, share buybacks, and dividend policies, all of which are intricately linked to the broader economic and financial ecosystem; moreover, this study considers the theoretical underpinnings of these strategic decisions within the framework of modern corporate finance theory, including the Modigliani-Miller theorem, trade-off theory, and pecking order theory, offering insights into how firms' financing behavior in a low-interest-rate context challenges or corroborates these models, thereby contributing to the ongoing discourse on optimal capital structure; additionally, the research highlights the role of regulatory changes and monetary policy decisions in shaping corporate behavior during this period, as central banks' accommodative stances not only influenced market liquidity but also affected firms' expectations and strategic planning, further complicating the decision-making process regarding debt issuance, leverage ratios, and investment timing; ultimately, this paper provides a comprehensive theoretical analysis of how corporate debt management practices evolved in response to the unique financial landscape emphasizing the importance of strategic foresight, adaptability, and risk assessment in ensuring that firms can sustain growth and stability in an era characterized by unprecedentedly low interest rates and the challenges that accompany such an environment.

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IJARIIE M V Shruthi. "STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING" International Journal Of Advance Research And Innovative Ideas In Education Volume 3 Issue 1 2017 Page 2059-2069
MLA M V Shruthi. "STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING." International Journal Of Advance Research And Innovative Ideas In Education 3.1(2017) : 2059-2069.
APA M V Shruthi. (2017). STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING. International Journal Of Advance Research And Innovative Ideas In Education, 3(1), 2059-2069.
Chicago M V Shruthi. "STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING." International Journal Of Advance Research And Innovative Ideas In Education 3, no. 1 (2017) : 2059-2069.
Oxford M V Shruthi. 'STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING', International Journal Of Advance Research And Innovative Ideas In Education, vol. 3, no. 1, 2017, p. 2059-2069. Available from IJARIIE, http://ijariie.com/AdminUploadPdf/STRATEGIC_CORPORATE_DEBT_MANAGEMENT_IN_A_LOW_INTEREST_RATE_ENVIRONMENT__REFINANCING__LEVERAGE__AND_INVESTMENT_DECISION_MAKING_ijariie24829.pdf (Accessed : ).
Harvard M V Shruthi. (2017) 'STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING', International Journal Of Advance Research And Innovative Ideas In Education, 3(1), pp. 2059-2069IJARIIE [Online]. Available at: http://ijariie.com/AdminUploadPdf/STRATEGIC_CORPORATE_DEBT_MANAGEMENT_IN_A_LOW_INTEREST_RATE_ENVIRONMENT__REFINANCING__LEVERAGE__AND_INVESTMENT_DECISION_MAKING_ijariie24829.pdf (Accessed : )
IEEE M V Shruthi, "STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING," International Journal Of Advance Research And Innovative Ideas In Education, vol. 3, no. 1, pp. 2059-2069, Jan-Feb 2017. [Online]. Available: http://ijariie.com/AdminUploadPdf/STRATEGIC_CORPORATE_DEBT_MANAGEMENT_IN_A_LOW_INTEREST_RATE_ENVIRONMENT__REFINANCING__LEVERAGE__AND_INVESTMENT_DECISION_MAKING_ijariie24829.pdf [Accessed : ].
Turabian M V Shruthi. "STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING." International Journal Of Advance Research And Innovative Ideas In Education [Online]. volume 3 number 1 ().
Vancouver M V Shruthi. STRATEGIC CORPORATE DEBT MANAGEMENT IN A LOW-INTEREST-RATE ENVIRONMENT: REFINANCING, LEVERAGE, AND INVESTMENT DECISION-MAKING. International Journal Of Advance Research And Innovative Ideas In Education [Internet]. 2017 [Cited : ]; 3(1) : 2059-2069. Available from: http://ijariie.com/AdminUploadPdf/STRATEGIC_CORPORATE_DEBT_MANAGEMENT_IN_A_LOW_INTEREST_RATE_ENVIRONMENT__REFINANCING__LEVERAGE__AND_INVESTMENT_DECISION_MAKING_ijariie24829.pdf
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