Management entrenchment and the cost of equity capital

This paper investigates the effect of management entrenchment on the cost of equity capital. Using the Bebchuk et al. (2009) entrenchment index data from 1989 through 2002, and using mainly the Ohlson and Juettner-Nauroth (2005) method to estimate the cost of capital, we find that increases (decreases) in management entrenchment are associated with increases (decreases) in costs of equity capital.

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Year of publication:	2011
Authors:	Collins, Denton ; Huang, Henry
Published in:	Journal of Business Research. - Elsevier, ISSN 0148-2963. - Vol. 64.2011, 4, p. 356-362
Publisher:	Elsevier
Keywords:	Cost of capital Management entrenchment Governance risk

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008871539