Preliminary Views on the Determinants of the Cost of Capital for the Emergent Market of Romania
Author:
Univ. Prof. Ion IONAŞCU, Ph. D.; Lecturer Mihaela IONAŞCU, Ph. D.; Univ. Prof. Daniela-Artemisa CALU, Ph. D.; Univ. Prof. Lavinia OLIMID, Ph. D.
JEL:
G32, M41
DOI:
Keywords:
corporate governance, the cost of capital, emergent markets
Abstract:
This paper investigates several factors affecting the cost of capital for listed Romanian companies. Although there is a large amount of literature investigating the drivers of the cost of capital internationally, there is currently little evidence from emergent markets. Based on a sample of 19 Romanian listed companies followed by financial analysts for the years 2008-2010, according to Thomson Reuters’ I/B/E/S data base, the paper confirms the international trends, showing that size, corporate governance policies, and growth are negatively correlated with the cost of capital.\r\n