Detail publikace

A Survey of External and Internal Factors Influencing the Cost of Equity

MOKHOVA, N. ZINECKER, M.

Originální název

A Survey of External and Internal Factors Influencing the Cost of Equity

Typ

článek v časopise ve Web of Science, Jimp

Jazyk

angličtina

Originální abstrakt

The cost of equity is an essential element of a business' financial decision-making process, which is influenced by a number of internal and external factors. This study intends to answer the question on how Czech CFOs perceive the impact of overall-economic and firm-specific factors on the cost of equity. The survey was carried out in 2015 and our sample covers 40 respondents. The findings show that there is a gap between the theory and practice and that the country’s specifics, in particular the low level of the financial market development, play a significant role in the perception of cost of equity capital determinants. First, the most commonly used cost of equity estimation approach is based on average historical returns. A considerably large number of the CFOs think that the ownership structure, dividend policy, ability to forecast financial results, stability of company´s earnings and flexibility in capital raising are the internal factors with the most significant impact on the cost of equity. Otherwise, a rather low number of respondents consider the information asymmetry, corporate governance and financial performance as having a strong influence on the cost of equity. In regard to the external factors, a substantial majority of the respondents acknowledges that the long- and short-term interest rates as well as inflation, sovereign debt and risks linked to the banking system and financial market strongly affect the cost of equity.

Klíčová slova

Cost of Equity; Capital, External Factors; Internal Factors, Economic Policy; Financial Stability; Disclosure; Corporate Governance; Social Factors; Survey; Czech Republic

Autoři

MOKHOVA, N.; ZINECKER, M.

Vydáno

2. 5. 2019

Nakladatel

KAUNAS UNIV TECHNOL

Místo

KAUNAS, LITHUANIA

ISSN

1392-2785

Periodikum

Engineering Economics

Ročník

30

Číslo

2

Stát

Litevská republika

Strany od

173

Strany do

186

Strany počet

14

URL

http://inzeko.ktu.lt/index.php/EE/article/view/19221

Plný text v Digitální knihovně

http://hdl.handle.net/11012/201693

BibTex

@article{BUT157975,
  author="Natalia {Mokhova} and Marek {Zinecker}",
  title="A Survey of External and Internal Factors Influencing the Cost of Equity",
  journal="Engineering Economics",
  year="2019",
  volume="30",
  number="2",
  pages="173--186",
  doi="10.5755/j01.ee.30.2.19221",
  issn="1392-2785",
  url="http://inzeko.ktu.lt/index.php/EE/article/view/19221"
}