Does Corporate Governance Affect the Cost of Equity Capital?

2010 ◽  
Author(s):  
Erica X. N. Li
Keyword(s):  
Corporate Governance ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
The Cost

Pengaruh Kualitas Corporate Governance Terhadap Cost Of Equity Perusahaan Manufaktur Di Indonesia

2018 ◽  
Vol 13 (1) ◽  
Author(s):  
Fiki Kartika
Keyword(s):  
Corporate Governance ◽  
Risk Premium ◽  
Manufacturing Industry ◽  
Equity Capital ◽  
Manufacturing Companies ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Ex Ante ◽  
The Cost ◽  
The Impact

This research aims to determine the impact of Good Corporate Governance (GCG) on the cost of equity for manufacturing companies in Indonesia. The sampling technique uses purposive sampling, namely companies listed on the Indonesia Stock Exchange. The analysis was carried out in the Manufacturing industry sector in 2013 - 2015. The GCG index was measured using five dimensions adopted from Black et al. (2003) and Cost of Equity is measured by the ex ante cost of equity capital using the Price Earning Growth (PEG) proxy. The reason for using ex ante cost of equity capital is ex-ante is more describing the role of investors in seeing the risk of a company. The results of this study indicate that GCG negatively affects on the cost of equity. GCG limits managerial opportunism and reduces agency conflicts between owners and agents. Therefore, shareholders are willing to accept a lower risk premium, effectively reducing equity costs.

scholarly journals Pengaruh Struktur Kepemilikan Dalam Mekanisme Corporate Governance Terhadap Cost Of Equity Capital

2009 ◽  
Vol 1 (1) ◽  
pp. 89
Author(s):  
Tarjo Tarjo
Keyword(s):  
Corporate Governance ◽  
Institutional Ownership ◽  
Equity Capital ◽  
Managerial Ownership ◽  
Strong Impact ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Cost

AbstractCorporate governance mechanisms believed to have strong impact to the companies’ performance. Corporate governance mechanisms examined in this study are managerial ownership and institutional ownership structure. The purposes of this study are to know the variables effect of managerial ownership and institutional ownership on cost of equity capital. The samples of the study are firms listed in Jakarta Stock Exchange in 2005. The F-test on the all variables at the level confidence 1% indicates the effect of all variables on cost of equity capital is significant. The result of this study showed that managerial ownership and institutional ownership have positive significant impact (at the level of confidence 1% and 5%) on the cost of equity capital. However this result showed that corporate governance mechanisms fail to decrease the cost of equity capital.

scholarly journals Green Building, Cost of Equity Capital and Corporate Governance: Evidence from US Real Estate Investment Trusts

2020 ◽  
Vol 12 (9) ◽  
pp. 3680
Author(s):  
Hui-Ching Hsieh ◽  
Viona Claresta ◽  
Thi Bui
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Green Building ◽  
Real Estate Investment Trusts ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Real Estate Investment ◽  
Investment Trusts ◽  
The Cost

Distinct from the existing literature, which mainly focuses on the impacts of green building practices on the owners’ benefits, this paper examines capital market participants’ perceptions of green building, specifically, the cost of equity capital. The study uses data regarding the United States Real Estate Investment Trusts (US REITs) from 2000 to 2016, employing a panel regression analysis and adopting a Price Earnings Growth (PEG) ratio model for the cost of equity capital estimation. We find a negative relationship between green building certification and the cost of equity capital. Our results encourage REITs to participate in green building certification and aim for higher green building rankings. In addition, we examine whether corporate governance could affect the intensity of green building practices in REITs. It is found that corporate governance practices implemented to align shareholders’ and managers’ interests, such as higher institutional holdings and a less dispersed ownership structure, positively impact firms’ resource allocation for green initiatives. The results suggest there could be mutual benefits for both economic profits and sustainable buildings.

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