Detail publikace

Corporate Life Cycle Identification: A Model Based on Relationship Between Return on Equity and Cost of Equity

KONEČNÝ, Z. ZINECKER, M.

Originální název

Corporate Life Cycle Identification: A Model Based on Relationship Between Return on Equity and Cost of Equity

Typ

článek v časopise ve Scopus, Jsc

Jazyk

angličtina

Originální abstrakt

The theory of shareholder value maximisation implies that the ultimate aim of each entrepreneur is to increase the market value of the company, i.e. to maximise the wealth of shareholders. This concept assumes that the returns to shareholders should outperform the cost of capital. The higher the spread is, the better the position of shareholders. The capital assets pricing model has been very often used for calculation the cost of equity as implicit costs, where the risk-free rate, the expected return of the market and the premium to operational and financial risks in the form of beta coefficient is considered. Moreover, the return on equity is significantly dependent on the corporate life cycle. The purpose of this paper is to develop an innovative model identifying stages of the corporate life cycle while using two variables: the rate of economic profit and the share of operational and financial risk within the total entrepreneurial risk. The model is verified by using data of a selected company. Identifying stages of the corporate life cycle should simplify the risk management and subsequently raise the capital access.

Klíčová slova

cost of equity, financial risks, operational risks, rate of economic profit, return on equity

Autoři

KONEČNÝ, Z.; ZINECKER, M.

Vydáno

7. 12. 2017

Nakladatel

University of Pardubice, Faculty of Economics and Administration

Místo

Pardubice

ISSN

1211-555X

Periodikum

Sborník vědeckých prací University Pardubice

Ročník

XXIV

Číslo

41

Stát

Česká republika

Strany od

67

Strany do

78

Strany počet

12

URL

http://hdl.handle.net/10195/69594

BibTex

@article{BUT142911,
  author="Zdeněk {Konečný} and Marek {Zinecker}",
  title="Corporate Life Cycle Identification: A Model Based on Relationship Between Return on Equity and Cost of Equity",
  journal="Sborník vědeckých prací University Pardubice",
  year="2017",
  volume="XXIV",
  number="41",
  pages="67--78",
  issn="1211-555X",
  url="http://hdl.handle.net/10195/69594"
}