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Cost of Capital: Literatures Review about Calculation Methods and Influencing Factors
Institute of Economics, Jinan University, Guangzhou, China
- 1 Institute of Economics, Jinan University, Guangzhou, China
Journal of Service Science and Management·Volume 12 (2019)·Pages 360–370·Published 11 March 2019·DOI10.4236/jssm.2019.123024
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Abstract
As one of the core concepts of corporate financial management, on the one hand, cost of capital is the cost of corporate financing and related to the financing behavior of firms, on the other hand, cost of capital is the necessary rate of return for investors, which decides investment activities. How to calculate cost of capital? What are the influencing factors for cost of capital? These two questions will play a fundamental role in judging whether cost of capital is high in China and promoting the cost reduction task proposed by the current supply-side reform.
KeywordsCost of CapitalInfluencing FactorsLiteratures Review
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