This research presents an approach to examining the impact of Corporate Financing Ratio (CFR) on the Weighted Average Cost of Capital (WACC) in automobile manufacturing companies listed on global stock exchanges. The research focuses on identifying optimal capital structures within the sector and outlining key operational requirements. Findings confirm that CFR has a significant influence on WACC, with a more pronounced effect in the automobile industry due to its high capital intensity and reliance on debt. By optimizing financial strategies, companies can reduce WACC volatility related to CFR, thereby improving financial stability and investment appeal. The primary research objective is to conduct a comparative analysis of the current financial requirements of internationally listed automobile manufacturers, explore the relationship between CFR and WACC, and highlight regulatory challenges in liquidity control through sector-specific comparisons. The key contribution of this research lies in uncovering the industry-specific characteristics of CFR management and its impact on WACC within the automotive sector.

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The Impact of the Corporate Financing Ratio on the Weighted Average Cost of Capital: Evidence from Automobile Manufacturing Companies

  • Ashot V. Matevosyan,
  • Vahe K. Mikayelyan,
  • Hovik H. Grigoryan,
  • Mane H. Matevosyan,
  • Ani Z. Grigoryan

摘要

This research presents an approach to examining the impact of Corporate Financing Ratio (CFR) on the Weighted Average Cost of Capital (WACC) in automobile manufacturing companies listed on global stock exchanges. The research focuses on identifying optimal capital structures within the sector and outlining key operational requirements. Findings confirm that CFR has a significant influence on WACC, with a more pronounced effect in the automobile industry due to its high capital intensity and reliance on debt. By optimizing financial strategies, companies can reduce WACC volatility related to CFR, thereby improving financial stability and investment appeal. The primary research objective is to conduct a comparative analysis of the current financial requirements of internationally listed automobile manufacturers, explore the relationship between CFR and WACC, and highlight regulatory challenges in liquidity control through sector-specific comparisons. The key contribution of this research lies in uncovering the industry-specific characteristics of CFR management and its impact on WACC within the automotive sector.