FACTORS AFFECTING THE ENTERPRISE’S COST OF CAPITAL IN UKRAINE

Анотація

Reducing the cost of capital is one of the main tasks of financial management of any enterprise. Because of dynamism of market conditions, the economic situation in the country, the existing requirements of the legislation, the volume, structure, cost of financial resources of the enterprise fall under the influence of various factors. The goal of this article is to analyze the specific features of the influence of different factors on the weighted average cost of capital in Ukraine as a basis for development of methods for its reducing. Investigation of factors that influence on the company's financial resources was carried out in the directions determined by the classical formula of the weighted average cost of capital (WACC), estimation of the cost of net assets’ attracting (CAPM model). Special attention was paid to the analysis of the domestic legislative base concerning the permitted forms of business organization in Ukraine, requirements for the emission and dividend policy of the enterprise, size of its registered, reserve capital, share of net assets in financial resources. Based on the statistical data of domestic business entities, their ownership structure, sources of financing, specific features of the economic sector’s influence were analyzed. As a result, the prevalence of corporate enterprises in Ukraine was revealed, which is connected with relatively low costs and favorable conditions for establishment and registration. As part of the analysis of the financial resources’ structure high level of dependence from debts, the popularity of commercial credit, negative effect of financial leverage were found at the Ukrainian enterprises. The features of the economic sector of enterprise were analyzed, that determine the volume of capital investments for creation and development, duration of the operational cycle, seasonality, operating and investment activities, the level of profitability, which affect the volume, structure, cost of the capital of business entity

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