Influence of Cost of Capital on Value of the Firm

Realizing the maximization of corporation value is the financial goal in modern companies. There are too many factors to impact the financial goal during coming financial goal into truth. Having fully analyzed the affective factors, the dynamic process to realize maximizing corporate value has been presented by formulas deduction. Moreover, influence of financing structure on value of the company has been demonstrated, as well as relationship between minimization of capital cost and maximization of the corporate value has been interpreted. Distorted factors that lead the minimizing capital cost mismatched with the maximizing corporate value have been pointed out.