Information disclosure, firm growth, and the cost of capital

• 成果类型: Article
• 署名作者: Dutta, Sunil; Nezlobin, Alexander
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.04.001
• 发表日期: 2017
• 页码: 415-431
• 关键词: cost of capital; information disclosure; Risk premium; GROWTH

摘要

We study how information disclosure affects the cost of equity capital and investor welfare in a dynamic setting. We show that a firm's cost of capital decreases (increases) in the precision of public disclosure if the firm's growth rate is below (above) a certain threshold. The threshold growth rate is higher when the firm's cash flows are more persistent, or when other firms in the economy are growing at low rates. While current shareholders always prefer maximum public disclosure, future shareholders' welfare decreases (increases) in the precision of public disclosure if the firm's growth rate is below (above) the threshold. (C) 2016 Elsevier B.V. All rights reserved.