The relationship between disclosure quality and cost of equity capital is an important topic in today's economy and generally, economic theory and anecdotal evidence suggest a negative association. Empirical work on this link, however, is confronted with major methodological drawbacks - neither disclosure level nor cost of capital can be observed directly - and has documented somewhat confounding results so far. Adopting a finite horizon version of the residual income model, I provide evidence on the nature of the above relationship and try to quantify the effect of a firm's voluntary disclosure policy on its implied cost of capital. Switzerland seems especially suited for an analysis of this kind given that Swiss firms have considerable reporting discretion and the mandated level of disclosure is low. For a cross-sectional sample of 73 non-financial companies I show a negative and highly significant association between the two variables. The magnitude is such that the most forthcoming firms enjoy about a 1.8% to 2.4% cost advantage over the least forthcoming firms. The findings persist even after controlling for other potentially influential variables, e.g. risk characteristics and firm size. Furthermore, adjusting for self-selection bias - a major concern in disclosure studies - the results are generally consistent with the main hypothesis although at lower levels of statistical significance. One reason for the strong relationship might be found in differing institutional factors between the US and the Swiss capital markets.

Master's Thesis from the year 2012 in the subject Economics - Finance, grade: 5.5, University of Zurich (Department of Banking and Finance), course: Economics and Finance, language: English, abstract: Does voluntary disclosure quality pay off? And if so, what are the driving forces behind the relationship of voluntary disclosure quality and the cost of equity capital? This study addresses these and other questions in the context of analyzing the determinants of the cost of equity capital for Swiss firms. The relation between voluntary disclosure quality and cost of equity capital is widely known to be affected by self-selection. Potential endogeneity bias is controlled for by adopting a two-stage least squares approach in a cross-sectional setting. Voluntary disclosure quality is proxied by the annual reports disclosure scores for a well-diversified sample of Swiss firms as developed by the Department of Banking and Finance of the University of Zurich. Further, an ex-ante cost of capital metric derived from the dividend discount model is used in this study. Empirical evidence shows that the association between voluntary disclosure quality and cost of equity differs with a firm's stock listing history. While the relation is predicted to be negative for firms at the IPO stage, it is likely reversed at some point in a firm's stock listing history. These results suggest that analysts' information processing activities negatively moderate the impact of voluntary disclosure quality on firm value. Importantly, the predicted interaction between voluntary disclosure quality and stock listing history remains significant when adjusting for endogeneity.

The aim of this article is to show the existence of a relationship between voluntary disclosure via corporate websites and the ex-ante cost of capital of companies listed on the BM&FBovespa. Ordinary Least-Squares regression equations produced the following results: (a) on average, the companies listed on the New Market showed a lower cost of capital (≈3.3 percentage points lower); (b) on average, the companies deemed to be the most aggressive showed a higher cost of capital (≈3 percentage points higher than the conservative companies); and (c) the metrics of corporate website disclosure did not appear to be related to cost of capital.

Seminar paper from the year 2020 in the subject Business economics - Accounting and Taxes, grade: 1.0, Mannheim University of Applied Sciences, language: English, abstract: A series of financial crises and corporate scandals gave rise to increasing concerns about prevailing models of corporate governance and disclosure and stimulated financial disclosure and reporting regulation. As a result, there has been considerably more interest in documenting the benefits of increased disclosure than its costs. Accordingly, numerous papers purport to provide evidence of capital market benefits through incremental disclosure. At the same time, firms refrain from voluntarily committing to increased disclosure, implying that there must be a trade-off between associated benefits and costs. Consequently, critics contend that the capital market benefits are inconclusive. Instead, increased disclosure may result in adverse capital market effects through increasing information asymmetry. Moreover, critics predict that increased disclosure imposes further costs on the firm. The purpose of this seminar thesis is to review existing literature on these expected costs of increased disclosure. Thereby, I focus on controversies regarding the heavily debated capital market effects as well as on specific forces that determine proprietary and litigation costs associated with increased disclosure. While a firm’s disclosure choices likely are a joint outcome of market forces and incentives provided by regulation, the seminar thesis is limited to voluntary disclosure choices as a starting point for possible disclosure regulation. The remainder of the seminar thesis is structured as follows. Section 2 reviews the literature on the capital market effects of voluntary disclosure through its impact on information asymmetry. Section 3 discusses the ambiguous impact of voluntary disclosure on litigation and proprietary costs. Section 4 concludes the seminar thesis.

Bachelor Thesis from the year 2015 in the subject Business economics - Investment and Finance, grade: 1.0, accadis International College Bad Homburg, course: Final Thesis, language: English, abstract: The potential relation of increased levels of corporate disclosure on a firm's cost of capital remains of great importance, both from a research-focussed and business- oriented point-of-view; however, the existence of methodological drawbacks has led to ever more complex studies, which eventually made the literature vast and confusing for outside readers. The purpose of this thesis was to organise and thereby simplify the different perspectives on a dynamic issue. It is argued that, in theory, enhanced transparency levels the marketplace by spreading information more equally among investors. Consequently, the information asymmetry component is mitigated, which translates into lower levels of estimation risk, transaction costs and default risk. After all, theoretical studies provided evidence that increased disclosure lowers the costs of capital. However, since neither of the involved components is directly observable, a myriad of approaches emerged to approximate actual figures. Although most of these proxies follow similar patterns, it is argued that none of the present approaches is free from constraints, which, in turn, affects the reliability of existing empirical studies. Research, after all, still lacks a generally accepted and holistic approach to the present day. In this context, one of the most recent findings provides a new and rather praxis-oriented perspective, by arguing that firms and investors are merely interested in a good-practice level of disclosure. Regardless of the perspective, an ultimate conclusion has yet to be revealed by the literature and it seems illusory that academics and practitioners agree on one approach in the future. Nevertheless, the contribution of this thesis was merely to structure and simplify the current state of a dynamic i

A guide to dealing with Wall Street in order to boost a company's earnings and stock price features advice for executives on such topics as addressing investors' concerns and maintaining credibility on Wall Street.

Zusammenfassung: This is an open access book. Hanoi University of Science and Technology - School of Economics and Management, University of Economics Ho Chi Minh City, University of Economics and Business - Vietnam National University, Hanoi, National Economics University - Faculty of Business and Management, The University of Danang - University of Economics, Vietnam National University - International School, Foreign Trade University, University of Hertfordshire (UK), AVSE Global (France) and PPM School of Management (Indonesia) will organize The 11th International Conference on Emerging Challenges: Smart Business and Digital Economy, Vietnam on November 3-4, 2023. We would like to invite you to be a part of the ICECH2023 and submit your research papers for presentation consideration. The aim of ICECH2023 is to provide a forum for academics and professionals to share research findings, experiences and knowledge for adaptation and business strategy in a post-Covid as well as various uncertainties and complexities in the world in the Asia-Pacific region. We welcome the submissions in Economics, Business, Innovation Management, and Business Law