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The Cost Of Capital – An Important Criterion In Fundamenting The Financing Decision Of The Company


  • Ph.D Student Ignatescu Valentina Diana

    (University “Alexandru Ioan Cuza”, Faculty of Economics and Business, Administration, Iasi, Romania)


Through this paper we want to identify which are the main factors that influence the company's financing decision. And from all the factors we will analyze the cost of capital. We would like to see what role plays the cost of the capital in fundamenting the financing decision and what are the main methods of determining the cost of own capital and the cost of borrowed capital. Determining the cost of capital plays an important role for companies, their objective being the choice of those sources of funding which have the lower cost.

Suggested Citation

  • Ph.D Student Ignatescu Valentina Diana, 2009. "The Cost Of Capital – An Important Criterion In Fundamenting The Financing Decision Of The Company," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(13S), pages 66-72, November.
  • Handle: RePEc:aio:rteyej:v:1:y:2009:i:13s:p:66-72

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    the financing decision; minimize the costs; weighted average cost of capital; cash flow; yield to maturity;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


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