Discussion of "The Impact of Federal Policies on Equity Capital" by Kenneth Field

1942 ◽  
Vol 9 (1) ◽  
pp. 73
Author(s):  
Frank Travers
Keyword(s):  
Equity Capital ◽  
Federal Policies ◽  
The Impact

scholarly journals The impact of the equity capital and trade credit financial sources on the company's performances sustainability

2020 ◽  
Vol 67 (3) ◽  
pp. 735-746
Author(s):  
Dragan Milošević ◽  
Jovanka Popović ◽  
Jelena Avakumović ◽  
Goran Kvrgić
Keyword(s):  
Trade Credit ◽  
Equity Capital ◽  
The Impact

scholarly journals The Effect of Chief Executive Officer Dominance and Shareholder Rights on Cost of Equity Capital in Pakistan

2020 ◽  
Vol V (III) ◽  
pp. 84-93
Author(s):  
Yawar Miraj Khilji ◽  
Shehzad Khan ◽  
Muhammad Faizan Malik
Keyword(s):  
Chief Executive Officers ◽  
Stock Exchange ◽  
Chief Executive ◽  
Fixed Effect Model ◽  
Equity Capital ◽  
Shareholder Rights ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Firm Level ◽  
The Impact

This Research explores the effect of Chief executive Dominance and Shareholder rights on Cost of equity of listed companies in an emerging equity market, Pakistan. The research is for the period of 2012 to 2018 for which firm level data of top 100 non-financial listed firms from Pakistan Stock Exchange has been examined by using descriptive statistics, a correlation -matrix, Pooled OLS and Fixed Effect Model approach. The impact of controlled variables which includes firm size, Financial Leverage, and Book to market ratio influence on the firms cost of equity has also been investigated. Research results indicate that when Chief executive officers align their interest with that of shareholders, the risk of agency problem is mitigated thus leading to lower cost of equity.

scholarly journals Impact of Corporate Political Connections on Cost of Equity: A Dynamic Panel Approach

2021 ◽  
Vol 13 (3) ◽  
pp. 45-65
Author(s):  
Aamir Amanat ◽  
Ahmed Imran Hunjra ◽  
Salman Ali Qureshi ◽  
Muhammad Hanif ◽  
Muhammad Razzaq Athar
Keyword(s):  
Lower Cost ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Equity Capital ◽  
Political Connections ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Financing Cost ◽  
Corporate Political Strategies ◽  
The Impact

We analyze the impact of corporate political connections on the cost of equity of non-financial firms listed at the Pakistan Stock Exchange. We extract data from the DataStream and Election Commission of Pakistan for the years 2001 to 2018. The Generalized Method of Moments is used for data analysis. This research finds that firms use political connections to enjoy a lower cost of equity capital. Further, firms with strong ties to political power obtain more benefits on financing cost as compared to non-connected firms. Besides, we also find that firms affiliated with a large business group enjoy a lower cost of equity than non-affiliated connected firms. The findings may be helpful for regulators to formulate suitable policies concerning the use of corporate political strategies and to assist unconnected and non-affiliated firms to access finance easily.

scholarly journals Earnings quality and the cost of equity capital: evidence on the impact of legal background

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahmed Hassan Ahmed ◽  
Yasean Tahat ◽  
Yasser Eliwa ◽  
Bruce Burton
Keyword(s):  
Earnings Quality ◽  
Institutional Ownership ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Content Type ◽  
The Usa ◽  
The Uk ◽  
The Cost ◽  
The Impact

Purpose Earnings quality is of great concern to corporate stakeholders, including capital providers in international markets with widely varying regulatory pedigrees and ownership patterns. This paper aims to examine the association between the cost of equity capital and earnings quality, contextualised via tests that incorporate the potential for moderating effects around institutional settings. The analysis focuses on and compares evidence relating to (common law) UK/US firms and (civil law) German firms over the period 2005–2018 and seeks to identify whether, given institutional dissimilarities, significant differences exist between the two settings. Design/methodology/approach First, the authors undertake a review of the extant literature on the link between earnings quality and the cost of capital. Second, using a sample of 948 listed companies from the USA, the UK and Germany over the period 2005 to 2018, the authors estimate four implied cost of equity capital proxies. The relationship between companies’ cost of equity capital and their earnings quality is then investigated. Findings Consistent with theoretical reasoning and prior empirical analyses, the authors find a statistically negative association between earnings quality, evidenced by information relating to accruals and the cost of equity capital. However, when they extend the analysis by investigating the combined effect of institutional ownership and earnings quality on financing cost, the impact – while negative overall – is found to vary across legal backdrops. Research limitations/implications This paper uses institutional ownership as a mediating variable in the association between earnings quality and the cost of equity capital, but this is not intended to suggest that other measures may be of relevance here and additional research might usefully expand the analysis to incorporate other forms of ownership including state and foreign bases. Second, and suggestive of another avenue for developing the work presented in the study, the authors have used accrual measures of earnings quality. Practical implications The results are shown to provide potentially important insights for policymakers, creditors and investors about the consequences of earnings quality variability. The results should be of interest to firms seeking to reduce their financing costs and retain financial viability in the wake of the impact of the Covid-19 pandemic. Originality/value The reported findings extends the single-country results of Eliwa et al. (2016) for the UK firms and Francis et al. (2005) for the USA, whereby both reported that the cost of equity capital is negatively associated with earnings quality attributes. Second, in a further increment to the extant literature (particularly Francis et al., 2005 and Eliwa et al., 2016), the authors find the effect of institutional ownership to be influential, with a significantly positive impact on the association between earnings quality and the cost of equity capital, suggesting in turn that institutional ownership can improve firms’ ability to secure cheaper funding by virtue of robust monitoring. While this result holds for the whole sample (the USA, the UK and Germany), country-level analysis shows that the result holds only for the common law countries (the UK and the USA) and not for Germany, consistent with the notion that extant legal systems are a determining factor in this context. This novel finding points to a role for institutional investors in watching and improving the quality of financial reports that are valued by the market in its price formation activity.

The impact of audit quality on earnings management and cost of equity capital: evidence from a developing market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ben Le ◽  
Paula Hearn Moore
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Discretionary Accruals ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Content Type ◽  
Big 4 ◽  
The Government ◽  
The Impact

Purpose This study aims to examine the effects of audit quality on earnings management and cost of equity capital (COE) considering the impact of two owner types: government ownership and foreign ownership. Design/methodology/approach The study uses a panel data set of 236 Vietnamese firms covering the period 2007 to 2017. Because the two main dependent variables of the COE capital and the absolute value of discretionary accruals receive fractional values between zero and one, the paper uses the generalised linear model (GLM) with a logit link and the binomial family in regression analyses. The paper uses numerous audit quality measures, including hiring Big 4 auditors or the industry-leading Big 4 auditor, changing from non-Big 4 auditors to Big 4 auditors or the industry-leading Big 4 auditor, and the length of Big 4 auditor tenure. Big 4 companies include KPMG, Deloitte, EY and PwC, whereas the non-big 4 are the other audit companies. Findings The study finds a negative relationship between audit quality and both the COE capital and income-increasing discretionary accruals. The effects of audit quality on discretionary accruals and the COE capital depend on the ownership levels of two important shareholders: the government and foreign investors. Foreign ownership is negatively associated with discretionary accruals; however, the effect is more pronounced in the sub-sample of state-owned enterprises (SOEs), the firms where the government owns 50% or more equity, than in the sub-sample of Non-SOEs. Originality/value To the best of the knowledge, no prior similar study exists that used the GLM with a logit link and the binomial family regression. Global investors may be interested in understanding how unique institutional settings and capital markets of each country impact the financial reporting quality and cost of capital. Further, policymakers of developing markets may have incentives to improve the quality of financial reporting and reduce the cost of capital which should result in attracting more foreign investments.

scholarly journals The Impact of Reclamation on Acceptable Strip Mining Royalty Payments

1977 ◽  
Vol 9 (2) ◽  
pp. 29-36
Author(s):  
John Otte ◽  
Michael Boehlje ◽  
Lowell Catlett
Keyword(s):  
Land Use ◽  
Strip Mining ◽  
Energy Prices ◽  
Federal Policies ◽  
Crucial Problem ◽  
Mineral Rights ◽  
Energy Independence ◽  
Surface Mineral ◽  
The Impact

Rapid increases in energy prices, federal policies of energy independence and further projections of energy shortages are encouraging development of sources of energy such as strip mining for coal. A key issue faced by the owner of surface and sub-surface (mineral) rights to land is determination of the price or fee (royalty) that should be extracted from a miner who wants access to the subsurface resource. This is a crucial problem because productivity and income potential of the surface resource may be altered during the mining process. Although extracting coal through strip mining is an obvious example of this phenomenon, the same issue is confronted in surface extraction of other minerals or in placement of easements or restrictions on land use options available to surface property-right owners.

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