Chen, Kevin C. W.; Chen, Zhihong; Wei, K. C. John - In: Journal of Financial and Quantitative Analysis 46 (2011) 01, pp. 171-207
In this paper, we examine the effect of shareholder rights on reducing the cost of equity and the impact of agency problems from free cash flow (FCF) on this effect. We find that firms with strong shareholder rights have a significantly lower implied cost of equity after controlling for risk...