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Country Risk Within CEE Area: Empirical Perspective on Corporate Cost of Equity

Petre Brezeanu (), Lucian Ionescu and Cristina Morar Triandafil ()
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Lucian Ionescu: Romanian Banking Institute, Romania

Annals of the University of Petrosani, Economics, 2009, vol. 9, issue 3, 81-86

Abstract: This paper studies corporate exposure to country risk from the perspective of the cost of equity. Indeed, corporations located into emerging countries are perceived as being riskier; therefore, investors require higher returns which increase the financing costs. Under these circumstances, financial managers face the challenge of quite a tough balance to keep up with: valorising the growth potential offered by the emerging countries on the condition of implementing powerful financial strategies, capable of protecting the corporation from the macroeconomic volatility. This research develops a practical approach on the way exposure to country risk impacts company’s financial balance, with a deep keen on the operational support offered by various methodologies that analysts get use of within the assessment process.

Keywords: country risk; corporate; exposure; equity; financing (search for similar items in EconPapers)
Date: 2009
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