We consider donor evolution and mass transfer in the microquasar V404 Cyg/GS 2023+338. Based on X-ray observations of its two outbursts, its average mass accretion rate is substantially lower than our model mass-loss rate from its low-mass giant donor. A likely solution to this discrepancy is that a large fraction of the mass flowing from the donor leaves the binary in the form of outflows from the accretion disc around the accretor. The outflow can be parameterizes by the fractions of the mass and angular momentum leaving the system. We calculate the latter as a function of the radius of the accretion disc from which the outflow takes place. We then perform detailed evolutionary calculations for V404 Cyg. Given our estimated average accretion rate, $>$70 per cent of the mass lost from the donor has to leave the binary. The allowed solutions for the actual donor mass loss rate are parameterized by our two outflow parameters. Our results are in agreement with the observed outflows from the outer disc as well as with the variable near-Eddington accretion observed during the outbursts, compatible with outflows from the vicinity of the black hole. We then calculate the expected rate of the orbital period change. Its future measurements can constrain the presence of an outflow in V404 Cyg and its parameters.
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