Publication detail

Cost of Equity as a Tool of Considering Risk Structure

KONEČNÝ, Z.

Original Title

Cost of Equity as a Tool of Considering Risk Structure

Type

conference paper

Language

English

Original Abstract

Every enterprise is connected with risks and there is necessary to know, which risks are more and which less considerable. So there is needed to measure these risks and find out their structure. This article has its aim to modify the constructional model by the Czech Ministry of Industry and Trade, used for calculation cost of equity, for the purpose of considering the structure of entrepreneurial risks, which are divided, according to Reiners (2004) into operational and financial risks. The cost of equity consist of five components in total. Two of them, namely the riskless rate and the risk reward to size of the company are related to operational risks and other two, namely the risk reward to financial stability and financial structure are assigned to indicators of financial risks. The last one, the risk reward to entrepreneurial risk can be related either to operational, or financial risk, according to its value.

Keywords

cost of equity, risk structure, operational risks, financial risks, constructional model

Authors

KONEČNÝ, Z.

RIV year

2013

Released

7. 2. 2013

Location

Brno

ISBN

978-5-7526-0597-0

Book

CONTEMPORARY PROBLEMS OF ECONOMICS, BUSINESS AND MANAGEMENT: THEORY AND PRACTICE

Pages from

201

Pages to

205

Pages count

5

BibTex

@inproceedings{BUT100006,
  author="Zdeněk {Konečný}",
  title="Cost of Equity as a Tool of Considering Risk Structure",
  booktitle="CONTEMPORARY PROBLEMS OF ECONOMICS, BUSINESS AND MANAGEMENT: THEORY AND PRACTICE",
  year="2013",
  pages="201--205",
  address="Brno",
  isbn="978-5-7526-0597-0"
}