Purpose

This paper presents a model for determining the optimal capital structure for cooperatives and explores the relationship between financial leverage and the ability of cooperatives to retire member equity.

Design/methodology/approach

A model is developed to determine the optimal capital structure and explore the relationship between capital structure and the rate at which a cooperative can retire member equity. Using data from cooperative financial statements, ordinary least-squares regressions are conducted to test two hypotheses on capital structure and equity retirement.

Findings

The model shows that the optimal capital structure is determined by the ratio of the rate of return on capital employed to the interest rate on borrowed capital and the required level of interest coverage. The regressions suggest that cooperatives choose their capital structure largely according to the rate of return on capital employed and the interest rate in a manner consistent with maximizing the rate of return on equity and that the rate at which cooperatives can retire member equity is directly related to leverage.

Research limitations/implications

The model does not consider unallocated earnings. Analysis of the relationship between leverage and equity retirement yields results contrary to the assumptions of earlier studies.

Practical implications

Cooperatives can use the model because the necessary parameters are easily understood and readily available from financial statements, lenders and industry sources.

Originality/value

The model is developed specifically for determining the capital structure of cooperatives and differs substantially from the corporate model. A theoretical basis is provided for the relationship between leverage and equity retirement.

中文翻译：

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农业合作社的最优资本结构及其对股权退休的影响

目的

本文提出了一种确定合作社最优资本结构的模型，并探讨了财务杠杆与合作社退役成员权益能力之间的关系。

设计/方法/方法

建立了一个模型来确定最佳的资本结构，并探索资本结构与合作社可以退休的成员权益的比率之间的关系。使用合作财务报表中的数据，进行普通最小二乘回归，以检验关于资本结构和股本报废的两个假设。

发现

该模型表明，最优资本结构由所用资本回报率与借入资本利率和所需利息覆盖率之比确定。回归表明，合作社在很大程度上根据所使用的资本回报率和利率来选择其资本结构，且方式与最大化股本回报率一致，而合作社可以退休的成员权益的利率与杠杆作用。

研究局限/意义

该模型不考虑未分配收益。对杠杆率与股权退休收益率之间关系的分析结果与先前研究的假设相反。

实际影响

合作社可以使用该模型，因为必要的参数易于理解，并且可以从财务报表，贷方和行业来源轻松获得。

创意/价值

该模型是专门为确定合作社的资本结构而开发的，与公司模型大不相同。为杠杆与股权报废之间的关系提供了理论基础。