An ownership capital fair cost as an efficiency cornerstone for industry capital investment projects under the crisis conditions

Аuthors

Konovalov V. L.

Moscow Aviation Institute (National Research University), 4, Volokolamskoe shosse, Moscow, А-80, GSP-3, 125993, Russia

e-mail: konovalov@finam.ru

Abstract

Long crisis of the world economy enhances significance of scientific approach to effective management of capital structure for industrial enterprise in regard to its crisis threat resistance ensuring. An integrated model is suggested to determine the ownership capital fair cost for the enterprise taking into account such factors as world financial system conditions, state and industrial sector risks as well as risks which are inherent for the enterprise. Conclusions and recommendations are presented about relatively efficient ways to overcome revealed conflicts within the bounds of the integrated model. The obtained results are based on analysis of the conflicts which are a cornerstone of contemporary financial management and associate with ownership capital fair cost determination.

Keywords:

ownership capital cost, capital investment project efficiency, discounting rate, risk premium, stock market volatility, beta coefficient