The Impact of Accounting Conservatism and Information Disclosure on the Cost of Equity Capital

• Main Authors: Yi-Ling Chen, 陳乙伶
• Other Authors: CHUANG, JIA-JIANN
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/88825839560520768980

碩士 === 中國文化大學 === 會計學系 === 105 === This study is to examine the impact of accounting conservatism and information disclosure on the cost of equity capital. In the study, the Fama and French (1993) three factor model was used to measure the cost of equity capital. The C-SCORE was proposed by Khan and Watts (2009) to measure accounting conservatism and to measure the disclosure of the information by the bid-ask spread. The empirical results show that only accounting conservatism policies can’t get the effect of reducing the cost of equity capital. This indicates that the general investors may not be able to understand the company's policy of accounting conservatism, and thus will not increase their investment preferences. Another empirical results show that when the enterprise information disclosure is more adequate and adopts a more accounting conservatism policy, it can get the effect of capital cost reduction. It means that information disclosure will help investors to determine the company's policy of accounting conservatism, and thus can be effectively reflected in financing cost.