Analysis Model of the cost of Capital in Emerging Capital Markets

In this paper, we study the determinants that affect the capital structure in emerging financial markets, as well as factors that affect the speed of adjustment to the optimal capital structure. The author provides analysis of the data for the major companies operating in the group of BRICS countries in the period from 2006 to 2014. The aim of this work is to identify the key and specific characteristics of the optimal capital structure formation in emerging financial markets. The analysis of companies involves the construction of empirical models based on the concept of dynamic compromise. In this paper, we identify a number of traditional and additional characteristics of the emerging markets of capital structure determinants. There were also identified the key features of formation of capital structure during the financial crisis. The analysis of the cost of capital for the companies was carried out. The chosen methodology for the analysis of formation of capital structure factors indicated that in stable economic conditions, the company adhere to the concept of dynamic compromise, but in times of crisis, in some cases, the companies adhere to the concept of the order or the concept of financing tracking of market trends. The study provides recommendations for optimizing the indicator of debt burden for companies operating in Brazil, Russia, India and China.