The impact of disclosure level on the cost of equity of brazilian companies
DOI:
https://doi.org/10.11606/rco.v9i25.97726Keywords:
Cost of Equity. Panel Data. Disclosure. IFRS.Abstract
The purpose of this study was to analyze the level of disclosure and its relation to the cost of equity of publicly traded companies, after the conversion of the Brazilian accounting standards to IFRS. The main theory used to support the findings of this research, concerning the level of disclosure was the Disclosure Theory, demonstrating as well the importance of accounting information to its several users. The research was guided by a descriptive and explanatory analysis, where 66 companies were analyzed from 2005 to 2011, and it was calculated the cost of capital and the disclosure index for each organization. It was applied the regression method with panel data, in order to choose one, among the three main models, Pooled, Fixed Effects and Random Effects, the one which was the most suitable to demonstrate whether and how the disclosure level affects the cost of capital of companies. The results show that there is no statistical evidence that the level of disclosure is related to the cost of capital, after the conversion to international accounting standards.
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