FINANCING DECISION BASED ON THE WEIGHTED AVERAGE COST OF CAPITAL

The paper refers to theoretical and practical aspects of the weighted average cost of capital, as an investment remuneration essential indicator, peculiar for each and every country, including beyond the country risk, additional risk factors specific to the relevant filed and related to the implementation and establishment of standard regulations. In order to have a general view over the total cost at which financial resources can be attracted from the market, this synthetic indicator is used to calculate an average weighted cost with the structure of the capital (practically the weight of credits, bonds or shares in the total capital necessary for the development of the business) and allows the decision maker to chose the lowest average cost plan among several financing plans.