Abstract
This thesis analyzes the optimal capital structure for a Bolivian company: Industrias Continental considering the new project of the firm. It starts describing the case study, background, current situation of the company and financial information in order to show an overall picture of the firm’s operations. Two theories related to this topic are reviewed, the Trade-Off Model and the Pecking Order, however it is demonstrated that the case study can not apply them because the lack of real factors such as a perfect capital market. There are also other factors that are considered in order to analyze how Industrias Continental and the other four Bolivian companies determine their optimal capital structure; between these determinants are size, industry, financial risk, tax shield, cost of capital etc. The last part of this thesis describes the project of the company which is to set up a new plant in a different city than where the current facility is. It also makes an analysis of three different scenarios and finally based on these results and the determinants, it gets to the optimal capital structure for Industrias Continental. Keywords: Optimal Capital Structure, Trade-Off Model, Pecking Order, Theoretical Determinants, Financial Information, Sensitivity Analysis.