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Actual paid cost of equity in construction

Author

Listed:
  • Tomáš Krulický

    (Institute of Technology and Business in České Budějovice, Czech Republic)

  • Veronika Machová

    (Institute of Technology and Business in České Budějovice, Czech Republic)

  • Ondřej Dvorák

    (Institute of Technology and Business in České Budějovice, Czech Republic)

Abstract

The value of the cost of equity capital is very important, both for all businesses and for investors, as it expresses the return on invested funds and is one of the most important factors in decision-making. The aim of the article is to determine the value of the actual paid costs of equity capital in the construction industry in 2016-2019. The used data from the Cribis / Albertina databases were processed using changes in the undistributed economic result of previous years and the economic result of the current accounting period. The results found show that the average cost of equity in the years 2016 - 2019 ranges from 29.35 % - 37.81 % and the median values range from 16.43 % - 24.24 %. The benefit of the presented results is primarily seen in their possibility of subsequent prediction of future costs of equity capital. A limitation of the research may be in the data used, for which it is appropriate when it is the most recent.

Suggested Citation

  • Tomáš Krulický & Veronika Machová & Ondřej Dvorák, 2022. "Actual paid cost of equity in construction," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 10(1), pages 408-419, September.
    • Handle: RePEc:ssi:jouesi:v:10:y:2022:i:1:p:408-419
    DOI: 10.9770/jesi.2022.10.1(22)
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    References listed on IDEAS

    as
    1. Gupta, Atul & Raman, Kartik & Shang, Chenguang, 2018. "Social capital and the cost of equity," Journal of Banking & Finance, Elsevier, vol. 87(C), pages 102-117.
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    More about this item

    Keywords

    economics result; costs on own capital; share on profit; average; median;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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