THE ANALYSIS OF FINANCIAL EQUILIBRIUM THROUGH THE COST OF THE INVESTED CAPITAL

Abstract

The financial equilibrium of a company can be analyzed through the cost of the invested capital. It is the most pragmatic approach of the financial equilibrium analysis because it takes into account the cost of invested resources, their capacity to account return. I suggest a model to approach the analysis of the balanced average cost of the invested capital using the method of chain substitutions. I reached the conclusion that the main consequence of changes in the balanced average cost of the capital is on the company’s value.

Keywords

• the financial equilibrium
• the cost of the invested capital
• the cost of the equity capital
• the factors of influence
• method