
DIFFERENCES IN THE COST OF CAPITAL: THE CASE OF FOOD COMPANIES FROM EMERGING AND DEVELOPED EUROPEAN ECONOMIES
Author(s) -
Magdalena Mądra-Sawicka
Publication year - 2020
Publication title -
acta scientiarum polonorum. oeconomia
Language(s) - English
Resource type - Journals
eISSN - 2450-047X
pISSN - 1644-0757
DOI - 10.22630/aspe.2020.19.3.27
Subject(s) - emerging markets , weighted average cost of capital , business , position (finance) , revenue , cost of capital , debt , equity (law) , cost of equity , capital structure , return on equity , finance , economics , financial capital , market economy , profitability index , capital formation , human capital , political science , law , incentive
The research aims to assess the cost of capital according to the WACC methodology across the food industry companies. The study also investigates the primary financial indicators for company position on the market as total assets, total revenues, and total equity. The study was conducted among 35 European countries from a sample of 1,274 records. The research period covers the years 2015–2018. The results of the survey underline the current asymmetric information problems in WACC food companies’ assessment between European emerging and developed economies. The emerging markets were characterized by a higher level of the cost of equity and debt. The cost of debt among companies from emerging economies was related to total assets value and revenues, which proves the importance of the size of enterprises in relation to their market assessment.