Executive pay disparity, as measured by chief executive officer (CEO) pay slice (CPS), is positively associated with the implied cost of equity, even after controlling for other determinants of the cost of equity. The difference in the cost of equity can explain 43% of the difference in the valuation effect attributable to CPS reported by Bebchuk, Cremers, and Peyer (2011). Further analysis sho...

Abstract Using a sample of publicly listed banks from 62 countries over the 1991–2017 period, we investigate impact capital on banks’ cost equity. Consistent with theoretical prediction that more equity in mix leads to fall firms’ costs equity, find better capitalized enjoy lower costs. Our baseline estimations indicate 1 percentage point increase bank’s equity-to-assets ratio lowers its by abo...

We reexamine the relation between disclosure indices and cost of equity capital employing an empirical specification similar to that Botosan (1997) for a substantially larger sample over extended time frame made possible by textual analysis. Our results provide no support hypothesis negative implied capital. Rather, consistent with bias as proxy expected return depicted Hughes, Liu, Liu (2009),...

The paper tests an approach based on firm characteristics to imply cost of equity in Canadian dollar. Using a sample of Canadian non-financial firms represented in I/B/E/S and Compustat Canadian files, and along the lines of Gebhardt, Lee, Swaminathan (2001), the paper proposes a five-factor model to estimate cost of equity ex-ante for Canadian firms. The five factors are dispersion of analyst ...