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- © University of Latvia, 2002-2011
Article
The Cost of Capital from the Polish Companies’ Perspective
Aleksandra Duliniec
ABSTRACT. The author describes the conceptual meaning of the cost of capital (COC) and relates its use to capital investment decisions and firm valuation. The cost of capital and capital raising have a crucial role for companies in emerging and transition economies. The main purpose of the article is to present how the Polish companies understand the cost of capital concept, which components of the COC are examined in practice, what methods of the COC estimation are applied and how the COC data are used in managing companies. An attempt to answer those questions was made possible after the survey of representative sample of Polish companies conducted in 2010. The sample included companies operating in various industries excluding financial sector.
KEYWORDS: cost of capital, rate of return, company valuation, capital components, Polish companies.
JEL classification: G310, G320, P2.