Study On Financing Cost And Financing Risk Of Developing Real Estate Projects

Financing cost is an important concept in financial management. It is the cost that the corporation pays for collecting and using capitals. It is thought as a significant financial criterion in the world. Project's cash flow and the financing cost have interior relationship during the real estate developing process of a building period. Analysis on the cash flow of a real estate project can have a direct observation of the financial situation and the financing cost as well. As a result,it can help to make decisions on financing for a real estate developer.This dissertation aims to find out the impact of cash flow on the financing cost and establish a simple model to calculate the financing cost of a real estate project so as to achieve the final goal of reducing financing cost and risks. So the research objectives of this dissertation are as follows:To establish the financing cost model based on cash flow of developing real estate projects.To analyze the risk factors in real estate project financing and provide rational suggestionsIn order to achieve these goals,the first part of dissertation analyzes some key factors of a real estate project,which are closely related to the financing cost. Then the theory of capital's time value is used to establish the model to calculate the financing cost which is consisted of some factors such as cost,revenue,project duration and so on. On the basis of the established model,financing cost analysis under different situations is carried out in order to compare the different costs generated by different cash flows of a real estate project.As the model to calculate financing cost is consisted of some parameters,any change of the parameters will influence the final financing cost. So in the second part of the dissertation,these influential factors are particularly analyzed. In addition,the practical situations in real estate and financing market in China are combined to carry out the risk analysis of financing,which is very helpful for the developers to make right financing strategy.The last part of the dissertation put forward a series of rational suggestions to reduce the financing cost as well as financing risk after discovering several problems existing in present construction project financing,on the basis of the comprehensive...