Prior studies report negative or insignificant relations between conditional conservatism and the cost of equity capital, arguing that conservatism reduces information risk. Using accounting-based conditional conservatism proxies, however, we find a significantly positive association between...

In this paper, we examine international differences in the effect of management forecasts (which we use to proxy for voluntary disclosure) on the cost of equity capital (COC) across 31 countries. We find that the issuance of management forecasts is associated with a lower COC worldwide, but the...

This article proposes an alternative approach to estimating the required rate of return on equity, combining the bond-plus risk-premium approach and the Capital Asset Pricing Model, and tests it using Canadian data. Individual stock risk-premia are classified into groups according to the point...

This paper provides a selective survey of Ohlson and Vuolteenaho-type accounting valuation models. The focus is on the valuation, return and cost of capital dynamics of these models. Emphasis is placed primarily on variations of these models that incorporate risk aversion, parameter uncertainty...

We explore a large sample of analysts' estimates of cost of equity capital (CoE) revealed in analysts' reports to evaluate their determinants and ability to capture expected stock returns. We first document that CoE estimates are more likely to be provided by less experienced and less busy...

The paper presents a method for calculating the cost of equity capital for the non-marketable securities of private firms and its difference from the cost of equity capital of an all else equal public firm (the private firm premium). The method is based on a theoretical framework that assumes...

We introduce a straightforward method to estimate the implied cost of equity, allowing growth horizons to fluctuate both cross-sectionally and through time. Our results show substantial dispersion of implied growth horizons in cross-sections and time-series for US firms in the years 1988-2013....

The objective of this paper was to analyze the effect of competition over better information on the cost of equity capital of Brazilian firms that trade their shares at the BM&FBovespa. The theoretical framework used models to analyze the expectations equilibrium when the information is not...

Using the Million Dollar List dataset containing major corporate philanthropic gifts, we examine whether corporate philanthropy is associated with a firm's cost of equity capital. On one hand, philanthropy is an allocation of shareholder returns to a third party with uncertain returns, thereby...

Using a large panel of U.S. public firms, we examine the relation between annual report readability and cost of equity capital. We hypothesize that complex textual reporting deters investors’ ability to process and interpret annual reports, leading to higher information risk, and thus higher...