Business, Management and Accounting
5 years ago

Growing debt in Slovak companies leads to lower corporate costs of capital.

Central European Business Review
How Capital Structure Affects Business Valuation: A Case Study of Slovakia
Katarína Valášková, George Lăzăroiu, Judit Oláh, Anna Siekelová, Barbora Lancova

Paper Summary

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The article explores how a company's mix of equity and debt affects its value. By studying Slovak enterprises, the researchers found that having more debt can lower the cost of capital for a company. This means that as companies take on more debt, their overall financial costs may decrease. The study used financial data from 17 stock companies in Slovakia to reach these conclusions.