THE COST OF CAPITAL – AN IMPORTANT CRITERION IN FUNDAMENTING THE FINANCING DECISION OF THE COMPANY

Through this paper we want to identify which are the main factors that influence the company's financing decision. And from all the factors we will analyze the cost of capital. We would like to see what role plays the cost of the capital in fundamenting the financing decision and what are the main methods of determining the cost of own capital and the cost of borrowed capital. Determining the cost of capital plays an important role for companies, their objective being the choice of those sources of funding which have the lower cost.