Funding sources - structure and values

Abstract

The ratio between own and borrowed capital characterizes the level of financial risk for the company. The interest-related costs are treated differently from tax regulators, it appears that attracting the same amount of funds but from different sources may cost the company differently. The concept of capital value is one of the basics in the theory of capital. It is not limited to calculating the relative magnitude of payments to be made to its owners providing financial resources but also characterizing the level of profitability of the invested capital that the firm must provide in order not to lower its market value . Each of these sources has a different value, but the logic of its formation is the same, and in its most general form it can be described with the well-known model of the balance between supply and demand of financial resources of a given type.