This study examines the impact of voluntary disclosure on the cost of capital and information asymmetry, and thereby on firm value in a comprehensively recursive model. We argue that there is unidirectional dependency among the information asymmetry, cost of capital, and such firm value, hence,...

We study a model of "information-based entrenchment" in which the CEO has private information that the board needs to make an efficient replacement decision. Eliciting the CEO's private information is costly, as it implies that the board must pay the CEO both higher severance pay and higher...