Assessing the corporate governance risk impact on the borrowed capital price in investing

Subject. This article deals with the construction of an econometric model for predicting the investor's discount when providing financing to non-public small and medium-sized businesses. Objectives. The article aims to identify corporate governance risks that are significant for a potential investor, and assess the impact of the probability of their occurrence on the investor's discount when providing financing for the implementation of an investment project, as well as build an econometric model for predicting the amount of such a discount. Methods. For the study, I used complex, systems analyses, as well as correlation and regression analysis using the Microsoft Excel spreadsheet editor. Results. The article identifies the most significant corporate governance risks for a potential investor and assesses the impact of the probability of their occurrence on the investor's discount when providing financing for the implementation of an investment project. The article also presents an econometric model for predicting the level of such a discount. Conclusions and Relevance. Quantifying the impact of corporate governance risk probabilities on the investor's financing rebate helps understand which of these risks are most significant to the investor and, accordingly, should be managed in order to mitigate them. The theoretical significance of the work lies in the substantiation of the possibility of using quantitative methods for assessing and modeling the impact of the probabilities of corporate governance risks on the price of borrowed capital. The practical significance of the study lies in the possibility of using the proposed model in the activities of Russian non-public companies to reduce the price of borrowed capital. The results of the study can be used by managers and owners of Russian non-public small and medium-sized businesses to reduce the cost of borrowed capital in the implementation of investment projects by managing corporate risks that are significant for the investor.