Earticle

초록

영어

There has been a debate as to whether accounting information quality priced on asset returns and systematically affects the cost of capital of firms in the world market. In this paper, we examine whether there is a relationship between accounting information quality proxied by accruals quality in the Korean markets, and whether it does affect the cost of capital. Although accruals quality is linked with some variables representing the uncertainty of future cash flows and thus it could be a good proxy for a risk, we find no evidence, unlike in the U.S, that this risk is systematically priced in stock returns and it does affect the cost of capital in Korea. Specifically, after controlling for the factors affecting the cost of debt and the cost of equity, we find that the proxy variable for accounting information quality has no significant relation with the cost of debt and the cost of equity. In particular, there is a flat relation between average stock returns and accruals quality. We also provide another perspective in examining whether accounting information quality affects the cost of equity capital. If accounting information quality affects the cost of equity, as accounting information quality becomes poorer, investors would require a greater risk premium associated with the well-know risk factor such as firm size, book-to-market, and price momentum. However, we find no evidence supporting this.

목차

Abstract
 1. Introduction
 2. Data and Accruals Quality
  2.1 Measuring Accruals Quality
  2.2 Summary of the Data
 3. Portfolio Construction and the Characteristics of AQ-sorted Portfolios
 4. Accounting Information Quality and the Cost of Capital
  4.1 Accounting Information Quality and the Cost of Debt
  4.2 Accounting Information Quality and Costs of Equity Capital
 5. Another Evidence That AQ does not matter on the Cost of Equity Capital
 6. Conclusions
 References
 Table

키워드

저자

• Ok-Hwa Ahan [ Korea University Business School, Anam-dong, Seongbuk-gu, Seoul 136-701, Korea ]
• Juwan Kim [ Korea University Business School, Anam-dong, Seongbuk-gu, Seoul 136-701, Korea ]
• Dongcheol Kim [ Korea University Business School, Anam-dong, Seongbuk-gu, Seoul 136-701, Korea ] Corresponding author

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330