 ANALYSIS ON THE CAUSALITY RELATIONSHIP BETWEEN INVESTMENTS AND THE CAPITAL’S MARGINAL COSTIrina Cibotariu ()
European Journal of Accounting, Finance & Business, 2020, vol. 14, issue 24, 61-66 Abstract: Capital’s cost is the result of two kinds of behaviours, namely the entrepreneur’s behaviour, on the one hand, and the investor’s behaviour. These two types of behaviours have a common background, namely maximizing the value of the business entity. The business entity itself can be considered as the very expression of the financing costs which are part of the optimization process of its financial strategy.The diversity of the investment options requires the assignment of those financial resources which are based on estimating the entity’s value which refers to the conversion of the future incomes into the present turnover of the business as such. Thus, there is an occasional cost from the point of view of the investors, whereas for the users, there is an average cost involved due to the fact that one needs to take into account the existence of the financial structure itself which is responsible for the existence of both the equity and the loan capital. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:scm:ejafbu:v:13:y:2020:i:23:p:61-66 Access Statistics for this article European Journal of Accounting, Finance & Business is currently edited by Stefan cel Mare University of Suceava, West University of Timisoara More articles in European Journal of Accounting, Finance & Business from "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration Contact information at EDIRC. |
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