Impact of corporate governance quality on the cost of equity capital in an emerging market: Evidence from Malaysian listed firms

2012 ◽  
Vol 6 (4) ◽  
Author(s):  
Zulkufly Ramly
Keyword(s):  
Corporate Governance ◽  
Emerging Market ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Listed Firms ◽  
Governance Quality ◽  
Corporate Governance Quality ◽  
The Cost

scholarly journals The Relationship between Governance Quality and the Cost of Equity Capital in Italian Listed Firms: An Update

2021 ◽  
Vol 14 (3) ◽  
pp. 131
Author(s):  
Francesca Bertoncelli ◽  
Paola Fandella ◽  
Emiliano Sironi
Keyword(s):  
Corporate Governance ◽  
Internal Audit ◽  
Equity Capital ◽  
Share Price ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Governance Quality ◽  
Corporate Governance Quality ◽  
The Cost ◽  
The Relationship

This paper investigates the relationship between corporate governance quality and the cost of equity capital, intended as the discount rate the market applies to a firm’s expected future cash flows to evaluate the current share price. Using data from the Italian listed corporations in 2018, this paper combines several attributes like board independence, board size, the existence of the internal audit, and CEO duality incorporated in a corporate governance quality index. Our results do not provide evidence of a statistically significant relationship between the corporate governance score and the firm’s equity capital cost. A possible explanation is that in recent years a greater homogeneity, and a generalized increase in corporate governance quality standards, has been observed in the Italian framework with worse companies that closed the gap with those with higher performances. Hence, lower variability in the corporate governance index results in a not significant effect of a composite index on reducing the cost of equity capital.

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.

The signalling role of audit committee characteristics and the cost of equity capital

2018 ◽  
Vol 30 (3) ◽  
pp. 387-406 ◽  
Author(s):  
Ranjith Appuhami
Keyword(s):  
Audit Committee ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Content Type ◽  
Listed Firms ◽  
Monitoring Process ◽  
Signalling Theory ◽  
The Cost

Purpose The purpose of this study is to examine whether audit committee characteristics influence the cost of equity capital. Design/methodology/approach Drawing on signalling theory, this study hypothesises that the presence of an AC with adequate characteristics serves as a market “signal” of the credibility of the effective monitoring process and hence affects the perception of capital providers on the cost of equity capital. The study uses a multiple regression analysis on data collected from a sample of top Australian listed firms. Findings The study finds that audit committee characteristics such as size, meeting frequency and independence are significantly and negatively associated with the cost of equity capital. However, there is no significant evidence that the financial qualifications of audit committee directors are associated with the cost of equity capital. Originality/value While there have been several studies examining the cost of equity capital, there is very limited research on the cost of capital in Australian firms. The study aims to fill this gap, in part, and contribute to the literature on corporate governance and signalling theory.

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.

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