Belkhir, Mohamed; Ben Naceur, Samy; Chami, Ralph; … - 2019
capital on banks' cost of equity. Consistent with the theoretical prediction that more equity in the capital mix leads to a … fall in firms' costs of equity, we find that better capitalized banks enjoy lower equity costs. Our baseline estimations … indicate that a 1 percentage point increase in a bank's equity-to-assets ratio lowers its cost of equity by about 18 basis …
