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ECONOMIC CONSEQUENCES FOR FIRMS’ COST OF CAPITAL

ECONOMIC CONSEQUENCES FOR FIRMS’ COST OF CAPITAL We are specifically interested in how previous research investigated the link between earnings/information quality and cost of equity capital, the relationship between discretionary accruals quality and cost of capital, the market process that determines cost of capital and allocates risk, and the relation between disclosure quality and cost of capital. This paper seeks to fill a gap in the current literature by examining the cost of capital for companies in regulated sectors, the nominal cost of capital that derives from market interest rates, the growth model of cost of equity, and the implicit or opportunity cost of capital. JEL Classification: F21, F32, G31 Keywords: cost of equity capital, financial distress, disagreement http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics, Management, and Financial Markets Addleton Academic Publishers

ECONOMIC CONSEQUENCES FOR FIRMS’ COST OF CAPITAL

Economics, Management, and Financial Markets , Volume 6 (3): 197-202 – Jan 1, 2012

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Publisher
Addleton Academic Publishers
Copyright
© 2009 Addleton Academic Publishers
ISSN
1842-3191
eISSN
1938-212X
Publisher site
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Abstract

We are specifically interested in how previous research investigated the link between earnings/information quality and cost of equity capital, the relationship between discretionary accruals quality and cost of capital, the market process that determines cost of capital and allocates risk, and the relation between disclosure quality and cost of capital. This paper seeks to fill a gap in the current literature by examining the cost of capital for companies in regulated sectors, the nominal cost of capital that derives from market interest rates, the growth model of cost of equity, and the implicit or opportunity cost of capital. JEL Classification: F21, F32, G31 Keywords: cost of equity capital, financial distress, disagreement

Journal

Economics, Management, and Financial MarketsAddleton Academic Publishers

Published: Jan 1, 2012

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