COST OF EQUITY, FINANCIAL INFORMATION DISCLOSURE, AND IFRS ADOPTION: A LITERATURE REVIEW
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Authors:
• PhD Student Lucian MUNTEANU, email: lucian.munteanu@ase.ro, Afiliation: Bucharest Academy of Economic StudiesPages:
• 71|84 -
Keywords: cost of equity capital, IFRS, disclosure, information asymmetry
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Abstract:
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 observable, and the models used to determine it are still debated, its importance has continuously increased and in the last decade several researchers in the accounting field started to use it in their empirical analyses. The present paper proposes a review of the scientific literature dedicated to the cost of equity capital, by selecting the papers with a major impact in the scientific trends, and also the latest approaches on this subject, and then, by focusing on the studies in the accounting area. From the accounting perspective, the interest is related to the impact of IFRS (International Financial Reporting Standards) on the cost of equity capital. The utility of this paper is that it reviews the latest scientific works treating the impact of IFRS on the cost of equity capital but also of other variables, thus updating the knowledge base in the Romanian scientific literature.
