Country Risk Within CEE Area: Empirical Perspective on Corporate Cost of Equity

This paper studies corporate exposure to country risk from the perspective of the cost of equity. Indeed, corporations located into emerging countries are perceived as being riskier; therefore, investors require higher returns which increase the financing costs. Under these circumstances, financial managers face the challenge of quite a tough balance to keep up with: valorising the growth potential offered by the emerging countries on the condition of implementing powerful financial strategies, capable of protecting the corporation from the macroeconomic volatility. This research develops a practical approach on the way exposure to country risk impacts company’s financial balance, with a deep keen on the operational support offered by various methodologies that analysts get use of within the assessment process.