WitrynaWe propose a new approach to estimate the implied cost of capital (ICC). Our approach is distinct from prior studies in that we do not rely on analysts' earnings forecasts to compute the ICC. ... "Dividend Taxes and Implied Cost of Equity Capital," Journal of Accounting Research, Wiley Blackwell, vol. 43(5), pages 675-708, December. Fama ... Witryna26 gru 2024 · ABSTRACT. This study examines the association between firm’s tax avoidance activities and cost of equity capital across 17 countries. Consistent with …
Investment and the weighted average cost of capital
Witryna1 lis 2013 · This study investigates whether a firm’s cost of equity capital is influenced by the extent of a firm’s real activities management. Using a large sample of U.S. firms, we find that our proxy for the cost of capital is positively associated with the extent of earnings management through the real activities manipulation after controlling for the … WitrynaThis study extends research into whether shareholder rights and disclosures of financial-related attributes are associated with firms' costs of equity capital. Using cost-of-equity-capital estimates derived from expected earnings growth valuation models, we find that firms with stronger shareholder rights regimes and higher levels of financial … culver city breaking news now
Cost of Equity Definition, Formula, and Example
Witryna1 kwi 2024 · Thus, researchers have typically relied on realized returns or implied costs of capital (ICC) metrics as proxies for expected stock returns, leading to calls for the identification of alternative benchmarks to test asset pricing theories. 1 In response, in this paper we evaluate the CoE capital disclosed by sell-side analysts as a proxy for ... Witryna20 lis 2024 · We model and estimate the term structure of implied costs of equity capital (and implied risk premia) at the firm level for the years 1996–2015 from forward looking option contracts. Empirical tests reject the assumption that the term structure of implied firm-level costs of equity is constant over different time horizons. Instead, … Witrynayields target prices and implied cost of capital estimates that are systematically too high for firms with volatile earnings. Overall, the evidence is inconsistent with the notion that attempts to smooth earnings can lead to a lower cost of equity capital. Keywords: cost of capital; earnings smoothness; asset pricing; analyst forecasts. eastmyth