In this paper we critically review the existing literature on methods of computing the implied
cost of capital (ICC). The ICC literature is characterised by a large number of heterogeneous …

We examine whether directors׳ and officers׳(D&O) liability insurance affects a firm's cost of
equity. We find a positive association between D&O insurance and the cost of equity …

This study tests the impact of earnings quality, investor protection, IFRS adoption and the
joint effects of these on cost of capital (measured by cost of equity capital and cost of debt) in …

Prior research documents a weak association between the implied cost of equity inferred
from analyst forecasts and realized returns. It points to predictable errors in analyst forecasts …

This study examines whether more capable managers affect the cost of equity capital. After
controlling for standard risk factors and firm characteristics, we find that higher managerial …

Under accounting principles, the recognition of earnings is path‐dependent and the path
depends on risk and its resolution: under the so‐called realization principle, earnings are …

The cost of equity capital is an important indicator for those who operate on the financial
markets, especially for managers and financial resources providers. Even if it is not directly …

We propose a two-dimensional evaluation scheme for assessing the quality of implied cost
of capital (ICC) estimates when price is noisy. Under fairly general assumptions, high-quality …

We provide a tractable model of firm-level expected holding period returns using two firm
fundamentals—book-to-market ratio and return on equity—and study the cross-sectional …

We argue that reductions in shareholder taxes should lower the cost of equity capital more
for financially constrained firms than for other companies. Consistent with this prediction, we …