Does ownership structure affect the ex-ante cost of capital?

The literature on ownership structure in Indian firms does not clearly show how various large shareholdings connected to controlling agency conflicts affect a firm’s outcome. Evidence suggests that shareholders are stronger position keep management more responsible than its dispersed shareholders, thereby positively affecting the This research gap has sparked interest examining relationship between three holdings – corporate, institutional, and foreign expected returns measured using an ex-ante cost of capital approach listed 2016 2021. study used pooled OLS technique estimate baseline results two-step system GMM validate results. indicate corporate have inverted U-shaped relationship, institutional relationship. also reveal while threshold for each firm industry can be different, average, above 34.3%, below 14.15%, 49.80% negatively returns. findings suggest optimal mix reduce risk any group exerting excessive control over company provide benefits terms efficient monitoring. Expropriation minority occur developing countries with weak legal protections. However, this mitigate issue by acting as check managerial problems, increasing efficiency.