Cost of capital and earnings transparency

• 成果类型: Article
• 署名作者: Barth, Mary E.; Konchitchki, Yaniv; Landsman, Wayne R.
• 署名单位: Stanford University; University of California System; University of California Berkeley; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2013.01.004
• 发表日期: 2013
• 关键词: accounting information; economic consequences; DISCLOSURE LEVEL; cross-section; IMPLIED COST; equity; returns; RISK; accruals; QUALITY

摘要

We provide evidence that firms with more transparent earnings enjoy a lower cost of capital. We base our earnings transparency measure on the extent to which earnings and change in earnings covary contemporaneously with returns. We find a significant negative relation between our transparency measure and subsequent excess and portfolio mean returns, and expected cost of capital, even after controlling for previously documented determinants of cost of capital. (C) 2013 Elsevier B.V. All rights reserved.