Debt Costs Determinants in Small Enterprise
Uwarunkowania rynkowe rozwoju mikro i małych przedsiębiorstw, A. Bielawska, ed., pp. 465-471, 2006
9 Pages Posted: 16 Aug 2007
The cost of debt for small enterprises is higher than for other enterprises. The article explains why the cost of debt for small business is higher than for other firms. It is a result of specific characteristics of small enterprises. First of all, the small enterprises are more risky than other firms. Next, in small enterprises, agency costs and information asymetry are different than in other firms. All of them cause, the growing of the cost of debt for small enterprises.
Notes: Downloadable document is in Polish.
Keywords: Value of liquidity, kost of debt, Value based management, Demand for Liquidity, agency costs, Risk, Uncertainty
JEL Classification: G39, G32, G11, M11, D81, O16, P33, P34
Suggested Citation: Suggested Citation