Accounting information and excess stock returns: the role of the cost of capital – new evidence from US firm-level data

Apergis, Nicholas; Artikis, George P.; Eleftheriou, Sofia; Sorros, John

doi:10.1080/09603107.2011.613756

Cited by 3 publications

(2 citation statements)

References 45 publications

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“…The researchers determine that low quality of earnings increase information asymmetry, which lead to higher CEC (Aboody et al, 2005;García Lara et al, 2011). For instance, Apergis et al (2012) empirically investigate the influence of accounting information and the earnings quality on the cost of capital. According to authors higher quality represents higher precession of public disclosure; when lower level of private information minimizes gains obtained by privately informed investors.…”

Section: Accounting Informationmentioning

confidence: 99%

Internal factors influencing the cost of equity capital

Mokhova¹,

Zinecker²,

Meluzín³

2018

JESI

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In this paper we compile and evaluate the research available on internal factors influencing the cost of equity capital. The topic has been extensively studied for the past few decades; however, the information is spread and is not accumulated. We begin by reiterating the reasons why information asymmetry drives financial decisions. Next, we review recent literature that focuses on financial disclosure and accounting information, i.e. internal factors that are directly connected with information asymmetry. In the remainder of our review we discuss a recent debate on the impact of corporate governance and social factors. Aside from theoretical contribution, the comprehensive literature review of existing studies results in formulation of a strategy how to decrease to cost of equity capital by means of internal factors adjustments. We believe that highlighting the key points in the debate will be beneficial for both academicians and practitioners who will be able to form an independent view of the approaches how to take influence on the cost of equity capital.

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Section: Accounting Informationmentioning

confidence: 99%

Internal factors influencing the cost of equity capital

Mokhova¹,

Zinecker²,

Meluzín³

2018

JESI

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“…The detailed academic research on cost of equity drivers on firm-level suggests that the overall macroeconomic conditions and in-house (internal) factors are powerful to explain the positive or negative views of corporate managers towards a specific financing strategy (Meluzin et al, 2018;Kljucnikov & Belas, 2016;Ng & Rezaee, 2015;Tran, 2014;Apergis et al, 2012;Daske et al, 2008;Easely & O'Hara, 2004;Geitzmann & Trombetta, 2003).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

A Survey of External and Internal Factors Influencing the Cost of Equity: The Case of Czech Companies

Mokhova

Zinecker

2019

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The cost of equity is an essential element of a business' financial decision-making process, which is influenced by a number of internal and external factors. This study intends to answer the question on how Czech CFOs perceive the impact of overall-economic and firm-specific factors on the cost of equity. The survey was carried out in 2015 and our sample covers 40 respondents. The findings show that there is a gap between the theory and practice and that the country's specifics, in particular the low level of the financial market development, play a significant role in the perception of cost of equity capital determinants. First, the most commonly used cost of equity estimation approach is based on average historical returns. A considerably large number of the CFOs think that the ownership structure, dividend policy, ability to forecast financial results, stability of company´s earnings and flexibility in capital raising are the internal factors with the most significant impact on the cost of equity. Otherwise, a rather low number of respondents consider the information asymmetry, corporate governance and financial performance as having a strong influence on the cost of equity. In regard to the external factors, a substantial majority of the respondents acknowledges that the long-and short-term interest rates as well as inflation, sovereign debt and risks linked to the banking system and financial market strongly affect the cost of equity.

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Reducing Cost of Capital. Do Voluntary Disclosure and Accounting Conservatism Contribute?

Alia

AbuSarees

2023

FIIB Business Review

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Theoretically, accounting conservatism and voluntary disclosure may be used as means to reduce cost of equity. Supportive evidence has been provided by the majority of studies, especially in developed countries. We address this issue by focusing on an underdeveloped country with political instability. The impact of accounting conservatism and voluntary disclosure on cost of capital is estimated using the data belongs to all companies listed on the Palestine Exchange during the period from 2015 to 2019. The results confirm the negative influence of voluntary disclosure and accounting conservatism on cost of capital.

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Accounting information and excess stock returns: the role of the cost of capital – new evidence from US firm-level data

Cited by 3 publications

References 45 publications

Internal factors influencing the cost of equity capital

Internal factors influencing the cost of equity capital

A Survey of External and Internal Factors Influencing the Cost of Equity: The Case of Czech Companies

Reducing Cost of Capital. Do Voluntary Disclosure and Accounting Conservatism Contribute?

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