Accounting Conservatism and Cost of Equity Capital – Evidence from Indonesia

Accounting conservatism and the cost of capital: international analysis∗

This study examines the contracting benefits of accounting conservatism on international debt and equity markets. Results show that firms domiciled in countries with more conservative financial reporting systems have significantly lower cost of debt and equity capital, after controlling for differences in legal institutions and securities regulations. I use one-year-ahead interest rate to measu...

the effect of conditional conservatism on cost of equity capital

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Conservatism and Aggregation: The Effect on Cost of Equity Capital and the Efficiency of Debt Contracts∗

This paper studies the joint effect of conservatism and aggregation on the cost of equity capital and the efficiency of debt contracts. In the model, a firm’s two assets are valued at either the lower-of-cost-or-market or fair value and the accounting report aggregates the value of the two assets. While the process of aggregation leads inevitably to a loss of information, what information is lo...

Lv 11088 the Impact of Accounting and Auditing Enforcement Releases on Firms ’ Cost of Equity Capital

Does Mandatory Adoption of International Accounting Standards Reduce the Cost of Equity Capital?

This paper examines whether the mandatory adoption of International Accounting Standards (IAS) in the European Union (EU) in 2005 reduces the cost of equity capital. Using a sample of 6,456 firm-year observations of 1,084 EU companies during the period of 1995 to 2006, I find evidence that mandatory introduction of IAS, on average, significantly reduces the cost of equity for mandatory adopters...