scholarly journals Risk Disclosure and Cost of Equity: A Bayesian Approach

Revista CEA ◽  
2020 ◽  
Vol 6 (11) ◽  
pp. 25-43
Author(s):  
Jose Miguel Tirado-Beltrán ◽  
José David Cabedo ◽  
Dennis Esther Muñoz-Ramírez
Keyword(s):  
Information Disclosure ◽  
Stock Exchange ◽  
Risk Information ◽  
Financial Risks ◽  
Risk Disclosure ◽  
Cost Of Equity ◽  
Global View ◽  
Bayesian Linear Regression ◽  
The Cost ◽  
The Relationship

This paper aims to analyze the relationship between risk information disclosure and the cost of equity of companies in the Spanish capital market. This study uses a set of 71 firms listed on Madrid stock exchange between 2010 and 2015; all of them are non-financial listed companies for which profit forecasts existed. The problem was analyzed using a Bayesian linear regression approach. The results show that cost of equity and disclosed risk information are not related if a global view of the latter is adopted. However, a positive relationship between financial risks and the cost of equity occurs when risk information is divided into financial and non-financial risks.

scholarly journals Carbon Information Disclosure, Marketization, and Cost of Equity Financing

2019 ◽  
Vol 16 (1) ◽  
pp. 150 ◽  
Author(s):  
Li Li ◽  
Quanqi Liu ◽  
Jun Wang ◽  
Xuefei Hong
Keyword(s):  
Negative Correlation ◽  
Information Disclosure ◽  
Cost Of Equity ◽  
Equity Financing ◽  
Heavy Pollution ◽  
The Cost ◽  
The Relationship

Using listed enterprises in China’s heavy pollution industry from 2009 to 2013, this study tests the relationship between marketization degree, carbon information disclosure, and the cost of equity financing. The results show that, regardless of marketization degree, the overall level of carbon information disclosure of listed enterprises in China’s heavy pollution industry is low. The content of carbon information disclosure is mainly non-financial carbon information, and the financial carbon information disclosure is very low. The cost of equity financing is different in areas with different marketization degrees, specifically speaking, the cost of equity financing is lower in regions with a high marketization degree than that of a low marketization degree. Carbon information disclosure, non-financial carbon information disclosure, and financial carbon information disclosure are negatively correlated with the cost of equity financing. The marketization degree has strengthened the negative correlation between carbon information disclosure, non-financial carbon information disclosure, financial carbon information disclosure, and the cost of equity financing, respectively.

scholarly journals The effect of risk disclosure on the cost of equity capital and firm value (An empirical study of manufacturing companies listed on the Indonesia Stock Exchange period 2015-2017)

2019 ◽  
Vol 9 (2) ◽  
pp. 133
Author(s):  
Eka Sri Sumardani ◽  
Rr Sri Handayani
Keyword(s):  
Firm Value ◽  
Stock Exchange ◽  
Equity Capital ◽  
Manufacturing Companies ◽  
Cost Of Equity Capital ◽  
Risk Disclosure ◽  
Cost Of Equity ◽  
Net Profit ◽  
The Cost ◽  
Corporate Risk

This study examines the effect of corporate risk disclosure on cost of equity capital and firm value. It uses the ratio of market value to book value, the ratio of leverage, consumer price index, growth, firm size, independent audit committee, and net profit during the study period and net profit in the previous year as control variables. The population consists of all manufacturing companies listed on the Indonesia Stock Exchange for the period 2015 - 2017. The sample was taken using a purposive sampling method, with the total sample of 99 companies. The data were analyzed using multiple regression analysis to test the hypothesis. The results indicate that corporate risk disclosure has a negative effect on the cost of equity capital but corporate risk disclosure has a positive effect on firm value.

scholarly journals The Effect of Disclosure and Earnings Quality on the Cost of Equity in Indonesia

2019 ◽  
Vol 6 (2) ◽  
pp. 42
Author(s):  
Yossy Octa Dewanti
Keyword(s):  
Data Analysis ◽  
Sampling Method ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Sample Selection ◽  
Selection Method ◽  
Cost Of Equity ◽  
The Cost ◽  
Relationship Of ◽  
The Relationship

This study aims to examine the effect of disclosure and earnings quality on the cost of equity. The theory used to explain the relationship of each variable in this study is agency theory and signal theory. The population used in this study is a manufacturing company listed on the Indonesia Stock Exchange for the period 2013-2017. The sample selection method used is the purposive sampling method and produced 87 companies as samples. Data analysis in this study used E-Views (Econometric Views). The results of this study succeeded in proving that the higher the disclosure and earnings quality can reduce the cost of equity.

scholarly journals Pengaruh Siklus Hidup Perusahaan Dalam Memoderasi Hubungan Manajemen Laba Dan Cost Of Equity Capital

2019 ◽  
Vol 1 (3) ◽  
pp. 1013-1032
Author(s):  
Indri Adelina Rizal ◽  
Nurzi Sebrina
Keyword(s):  
Life Cycle ◽  
Earnings Management ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Equity Capital ◽  
Manufacturing Companies ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
The Cost ◽  
The Relationship

This study aims to provide empirical evidence whether earnings management can influence the cost of equity capital and whether the company's life cycle can strengthen or weaken the relationship between earnings management and the cost of equity capital. Profit Management in this study was measured using a discretionary accrual proxy. The company's life cycle is measured using the company's cash flow pattern and the cost of equity capital measured using measurements from Ohlson's (1995) model modified by Utami (2005). This study is classified as causative research. The population in this study are manufacturing companies listed on the Indonesian Stock Exchange period of 2013 to 2017.By using purposive sampling method, there were 60 companies as the research’s sample. The type of data used is secondary data obtained from www.idx.co.id. The analysis used in this study is multiple linear regression analysis. The results of this study are that earnings management has no significant positive effect on the cost of equity capital and the company's life cycle is not able to strengthen or weaken the relationship of earnings management with the cost of equity capital.

scholarly journals The Impact of Stock Price Crash Risk on the Cost of Capital: Empirical Study from China

2021 ◽  
Vol 3 (2) ◽  
pp. 88-97
Author(s):  
Muhammad Hamza Khan ◽  
Muhammad Rizwan
Keyword(s):  
Information Disclosure ◽  
Stock Price ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Cost Of Debt ◽  
Crash Risk ◽  
Cost Of Equity ◽  
Coefficient Of Skewness ◽  
The Cost ◽  
The Impact

This study analysed the effect of Sock Price Crash Risk (SPCR) on the cost of capital in Chinese listed firms in the Shenzhen stock exchange and the shanghai Stock Exchange. A sample of 290 firms based on the highest value of assets of each firm was used. The cost of capital consists of two factors; the cost of equity (COE) and the cost of debt (COD). The SPCR is measured by using two statistics, one is NCSKEW means the negative coefficient of skewness of the firm-specific weekly returns and the second is DUVOL that means Down to-Up Volatility used to measure the crash likelihood weekly return of firm-specific and used the Modified PEG ratio model of Eston approach to measuring the cost of equity. We used panel data to run the regression model analyses. SPCR was found to have a significantly positive relationship with the cost of equity and cost of debt. Also, the sample was divided into the State-Owned enterprise (SOEs) and Non-State-Owned enterprises (NSOEs) for comparison. The results show that the impact of SPCR on the COE and COD is stronger in SOEs than NSOEs. The regulators need to improve and strengthen the development of laws and regulations related to company information disclosure, to reduce the cost of capital of listed companies and improve the efficiency of financing the Chinese capital market. Companies need to work together to strengthen internal controls, create a good disclosure environment, and prevent the SPCR.

scholarly journals Disclosure of Risk Factors on Prospectus and Initial Public Offerings (IPO) Performance: Evidence from Indonesia

2020 ◽  
Vol 15 (1) ◽  
pp. 15
Author(s):  
Randy Kuswanto
Keyword(s):  
Initial Public Offerings ◽  
Negative Impact ◽  
Stock Exchange ◽  
Investment Decision ◽  
Ordinary Least Squares ◽  
Risk Information ◽  
Risk Disclosure ◽  
Public Offerings ◽  
Qualitative And Quantitative ◽  
Investment Decision Making

The purpose of this study is to investigate how risk information disclosed in prospectus influences the initial returns of initial public offerings (IPOs) in Indonesia. This study collected 62 sample IPOs offered in the Indonesian Stock Exchange from 2017–2018. Ordinary least squares was performed to test the association between risk disclosure and initial returns. Results indicate that prospectus provides risk information associated with initial returns. Both qualitative and quantitative dimensions have a significant negative impact on the initial returns. It can be concluded that risk information has an important role in the underpricing phenomenon. The study has extended the available literature by investigating risk disclosure from a dual perspective. Moreover, qualitative and quantitative assessments both have a direct impact on the initial returns and must be considered in investment decision making. Keywords: Risk, IPO, underpricing, initial returns

scholarly journals Analyst Following, Environmental Disclosure and Cost of Equity: Research Based on Industry Classification

2019 ◽  
Vol 11 (2) ◽  
pp. 300 ◽  
Author(s):  
Sheng Yao ◽  
Haotian Liang
Keyword(s):  
Least Squares ◽  
Information Disclosure ◽  
Ordinary Least Squares ◽  
Environmental Information ◽  
Mediating Effect ◽  
Cost Of Equity ◽  
Environmental Disclosure ◽  
Analyst Following ◽  
Environmental Information Disclosure ◽  
The Cost

Prior studies argue that an analyst is an important mediator between a firm and investors, and has a significant influence on the cost of equity. However, how analyst following influences the cost of equity has not been studied in depth. In the Chinese setting, where environmental information has attracted much attention, we explore the interaction among analyst following, environmental information disclosure, and cost of equity. With two linear regression methods of ordinary least squares (OLS) and two-Stage least squares (2SLS), we establish regressions to verify the relationships among them by using empirical data from 2004 to 2011 in China. The results show that analyst following can improve environmental information disclosure and lower the cost of equity. This interaction is more significant in the heavy-pollution industry and after new environmental policy is issued. We also find that environmental disclosure has a mediating effect, which determines how analyst following influences the cost of equity. The results expand the research on environmental information’s motivations and economic consequences.

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