Disclosure and the Cost of Capital: a Survey of the Theoretical Literature

• Jeremy Bertomeu ^[1] ; Edwige Cheynel ^[2]
  1. [1] City College of New York

     City College of New York

     Estados Unidos

     
  2. [2] Columbia Business School
• Localización: Abacus: A journal of accounting, finance and business studies, ISSN 0001-3072, Vol. 52, Nº 2, 2016, págs. 221-258
• Idioma: inglés
• DOI: 10.1111/abac.12076
• Texto completo no disponible (Saber más ...)
• Resumen

  • This article offers a survey of theoretical research on disclosure and the cost of capital. We summarize the current state of the literature and discuss the channels through which information affects the cost of capital. After giving an overview of asset pricing theory, we examine the rationale for an accounting risk factor or an ex-ante effect of information on the cost of capital. Then, we discuss the role of voluntary disclosure, heterogenous beliefs, investor base, liquidity shocks, earnings management, and agency problems as determinants of the cost of capital. Linkages between productive decisions and the cost of capital, and their implication for investor welfare, are also examined.