Cost of capital plays a very key role in the enterprise financial management anddecision-making. Its essence is an attitude which the investors anticipate theenterprise financial risk. Enterprises’risk determines the size of the cost ratio ofcapital. Common capital cost pricing model only definites and calculates interestsfrom liabilities and owner rights. It is not a full summary of enterprise financial risk.And the power generation enterprises in China compare with other enterprises havetheir own particularity, so the current cost of capital pricing model cannot reflectfinancial risk of the electricity power enterprise of our country.The SASAC revised of the” central person in charge of the enterprise operatingperformance evaluation procedures” for the central enterprises in 2006 and 2009whose cost rate of capital makes special provisions. The provisions make a reasonablestandard of central enterprises and state-owned enterprises related to comprehensivecapital cost rate, better reflect the financial risk of the enterprise; on the other hand,unified standard cases cover many problems of the state-owned enterprises. Thisarticle is made in this background.Financial risk is divided into system risk and non system risk. This articleresearches the power generation enterprises’financial risk. Financial risk is theresearch object. The power generation enterprises in China are the research samples.Their financial index data from 2008 to 2010 is the study of data. Through the wholepower industry comprehensive coefficient study, it determines the power enterprises’the system risk, and then calculate electric enterprises basic cost of capital; throughthe establishment of power generation enterprise’s financial risk model ,it evaluates asystem of power financial risk of generation enterprises. And on this basis, itdetermines the comprehensive capital cost rate’s adjustment value. Finally, in profitsfrom the predecessor research results as well as the central SASAC” person in chargeof the enterprise operating performance evaluation procedures” for the integratedenterprise capital cost rate determining method, this article establishes the cost of capital pricing model, which supplies generating electricity enterprise with modelsupport in determinesing its own comprehensive capital cost rate. It has a certainguiding significance for power generation enterprise in the promotion of integratedcapital cost rate.
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