ECONOMIC CONSEQUENCES FOR FIRMS’ COST OF CAPITAL
ECONOMIC CONSEQUENCES FOR FIRMS’ COST OF CAPITAL

Summary/Abstract: We are specifically interested in how previous research investigated the link between earnings/information quality and cost of equity capital, the relationship between discretionary accruals quality and cost of capital, the market process that determines cost of capital and allocates risk, and the relation between disclosure quality and cost of capital. This paper seeks to fill a gap in the current literature by examining the cost of capital for companies in regulated sectors, the nominal cost of capital that derives from market interest rates, the growth model of cost of equity, and the implicit or opportunity cost of capital.

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