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Factor affecting the cost of borrowed capital from the perspective of the appraiser
[Faktory ovlivňující výši nákladů cizího kapitálu z pohledu odhadce]

Author

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  • Lucie Rudolfová

Abstract

The subject of the paper is a qualitative analysis of factors that have an impact on the costs of borrowed capital. These are potentially useful factors in estimating the cost of borrowings for business valuation purposes. They are therefore viewed from the perspective of an appraiser. A qualitative analysis of these factors serves not only as a guide which factors and how shall be taken into account in the estimation but also as an initial pre-selection of factors that will be further tested in the broader project using statistical analysis. The factors examined are indebtedness, interest coverage, business size, economic cycle phase, marketability of shares, loan currency, industry, guarantee options, maturity and loan volume.

Suggested Citation

  • Lucie Rudolfová, 2019. "Factor affecting the cost of borrowed capital from the perspective of the appraiser [Faktory ovlivňující výši nákladů cizího kapitálu z pohledu odhadce]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2019(4), pages 15-30.
  • Handle: RePEc:prg:jnlcfu:v:2019:y:2019:i:4:id:537:p:15-30
    DOI: 10.18267/j.cfuc.537
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    References listed on IDEAS

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    4. Melitz, Jacques & Pardue, Morris, 1973. "The Demand and Supply of Commercial Bank Loans," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 5(2), pages 669-692, May.
    5. Bonfim, Diana & Dai, Qinglei & Franco, Francesco, 2018. "The number of bank relationships and borrowing costs: The role of information asymmetries," Journal of Empirical Finance, Elsevier, vol. 46(C), pages 191-209.
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