FACTORS DETERMINING THE FIRM’S COST OF CAPITAL

           Associate Professor PhD Marioara Mirea, E-mail: mm_mirea@yahoo.com
              Lecturer PhD Nicoleta Asalos,E-mail: nicoleta_asalos@yahoo.com
             Professor PhD Aivaz Kamer Ainur,E-mail: kamer_aivaz@yahoo.com
                                „Ovidius” University Constanta


        Abstract: This study is ready to connect the firm’s investment decisions with its financing
decisions. The cost of capital provides this fundament al connecting link. The term cost of capital
may be used interchangeably with the firm’s required rate of return, the hurdle rate, the discount
rate, and the firm’s opportunity cost of funds. This study is about the concepts behind the cost of
capital, as well as the procedures for estimating the firm’s cost of capital. For the most part, we
will assume a constant debt-to-equity mix when computing a company’s cost of capital.

       Key words: the cost of capital, financial decisions.

       Jel codes: L00, D24, F21.