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Advantages And Risks Involved In Financing Companies Development Through The Capital Market

Mihaela Sudacevschi ()
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Mihaela Sudacevschi: Institute for World Economy, Romanian Academy

Global Economic Observer, 2021, vol. 9, issue 2, 91-96

Abstract: The financial market offers to companies a certain number of sources of for financing, each of them, or a combination of them, representing the optimal solution, at a certain moment, for a particular investment. The choice of financing methods depends on the volume of financial resources required, the period of time they are intended to be mobilised, the price of the borrowed resources and, in particular, on the ability of the firm to repay the contracted funds. Through the stock exchange, the economic agents aim to obtain the financial resources necessary for the development of their activity and, at the same time, the transformation into liquidity of the securities (whose issuers they are), both in order to capitalize their current performances and to cover the risks associated with them. This paper wants to show that the stock exchange is one way for shareholders to recover their investments. Thus, the listing of the financial securities on the stock exchange ensures their dissemination to the holders of capital and allows the shareholders to recover the invested capital and to collect the added value with which the risk assumed at the time of acquisition of the respective securities is remunerated.

Keywords: securitie; bonds; capital market; stock exchange; financial risk; bank loans; stock exchange listing (search for similar items in EconPapers)
Date: 2021-12
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