Please use this identifier to cite or link to this item:
https://hdl.handle.net/2440/108669
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Type: | Journal article |
Title: | Segment disclosure and cost of capital |
Author: | Blanco, B. Garcia Lara, J. Tribo, J. |
Citation: | Journal of Business Finance and Accounting, 2015; 42(3-4):367-411 |
Publisher: | Wiley |
Issue Date: | 2015 |
ISSN: | 0306-686X 1468-5957 |
Statement of Responsibility: | Belen Blanco, Juan M. Garcia Lara and Josep A. Tribo |
Abstract: | We investigate whether segment disclosure influences cost of capital. Improved segment reporting is expected to decrease cost of capital by reducing estimation risk. However, in a competitive environment segment disclosure may also generate uncertainties about future prospects and lead to a larger cost of capital. Asset-pricing tests confirm that segment disclosure is a priced risk factor. Also, segment disclosure reduces ex-ante estimates of cost of equity capital and other measures connected to risk. These results suggest a negative relation between segment disclosure and cost of capital. Our results also show that competition reduces, but does not eliminate, the previous relationship. |
Keywords: | Segment disclosure; earnings qualty; forecast error; cost of capital |
Rights: | © 2015 John Wiley & Sons Ltd. |
DOI: | 10.1111/jbfa.12106 |
Published version: | http://dx.doi.org/10.1111/jbfa.12106 |
Appears in Collections: | Aurora harvest 3 Economics publications |
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RA_hdl_108669.pdf Restricted Access | Restricted Access | 311.78 kB | Adobe PDF | View/Open |
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