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

  • Economics


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.

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