Corporate Life Cycle Identification: A Model Based on Relationship Between Return on Equity and Cost of Equity

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216305%3A26510%2F17%3APU125983" target="_blank" >RIV/00216305:26510/17:PU125983 - isvavai.cz</a>

Výsledek na webu

<a href="http://hdl.handle.net/10195/69594" target="_blank" >http://hdl.handle.net/10195/69594</a>

DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Corporate Life Cycle Identification: A Model Based on Relationship Between Return on Equity and Cost of Equity

Popis výsledku v původním jazyce

The theory of shareholder value maximisation implies that the ultimate aim of each entrepreneur is to increase the market value of the company, i.e. to maximise the wealth of shareholders. This concept assumes that the returns to shareholders should outperform the cost of capital. The higher the spread is, the better the position of shareholders. The capital assets pricing model has been very often used for calculation the cost of equity as implicit costs, where the risk-free rate, the expected return of the market and the premium to operational and financial risks in the form of beta coefficient is considered. Moreover, the return on equity is significantly dependent on the corporate life cycle. The purpose of this paper is to develop an innovative model identifying stages of the corporate life cycle while using two variables: the rate of economic profit and the share of operational and financial risk within the total entrepreneurial risk. The model is verified by using data of a selected company. Identifying stages of the corporate life cycle should simplify the risk management and subsequently raise the capital access.

Název v anglickém jazyce

Corporate Life Cycle Identification: A Model Based on Relationship Between Return on Equity and Cost of Equity

Popis výsledku anglicky

The theory of shareholder value maximisation implies that the ultimate aim of each entrepreneur is to increase the market value of the company, i.e. to maximise the wealth of shareholders. This concept assumes that the returns to shareholders should outperform the cost of capital. The higher the spread is, the better the position of shareholders. The capital assets pricing model has been very often used for calculation the cost of equity as implicit costs, where the risk-free rate, the expected return of the market and the premium to operational and financial risks in the form of beta coefficient is considered. Moreover, the return on equity is significantly dependent on the corporate life cycle. The purpose of this paper is to develop an innovative model identifying stages of the corporate life cycle while using two variables: the rate of economic profit and the share of operational and financial risk within the total entrepreneurial risk. The model is verified by using data of a selected company. Identifying stages of the corporate life cycle should simplify the risk management and subsequently raise the capital access.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

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OECD FORD obor

50202 - Applied Economics, Econometrics

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach<br>I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2017

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Sborník vědeckých prací University Pardubice

ISSN

1211-555X

e-ISSN

1804-8048

Svazek periodika

XXIV

Číslo periodika v rámci svazku

41

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

12

Strana od-do

67-78

Kód UT WoS článku

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EID výsledku v databázi Scopus

2-s2.0-85038371461