Determinants of Weighted Average Cost of Companies Using Non-Financial Reporting Initiatives in Pakistan

Danial Zahid Shafique, Muhammad Asif, Arif Hussain, Muhammad Khan, Khusniddin Fakhriddinovich Uktamov and Mamdouh Abdulaziz Saleh Al-Faryan

SAGE Open, 2024, vol. 14, issue 1, 21582440241235548

Abstract: In recent years, the global business landscpae has witnessed a paradigm shift toward sustainable and responsible corporate practices. This transition has been particulalrly pronounced in the energy sector where companies are increasingly recongzing the importance of Non-Financial Reporting Initiatives (NFRI) in shaping their operational strategies. The current study endeavors to delive into the intricate relationship between NFRI and the Weighted Average Cost of Capital (WACC) for energy companies in Pakistan. The current study relied on Partial Least Square Structural Equation Modeling (PLS-SEM) technique to extract useful information about the study topic. The data collected for the period 1999 to 2020 from World Development Indicators. The findings of the study revealed that energy consuption factors are responsiblee for around 31.32% variations in WACC, while economic factors contribute 43.98% variations. The financial factors showed to have 35.72% variations in the WACC. The findings of current study revealed to implement policies fostering sustainable energy practices, robust economic growth, and prudent financial management to positively influence the Weighted Average Cost of Capital (WACC) for enhanced business competitiveness and investment attractiveness.

Keywords: Weighted Average Cost of Company (WACC); multi-capital approach; non-financial factors; economy; energy companies (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:14:y:2024:i:1:p:21582440241235548

DOI: 10.1177/21582440241235548

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