Corporate Governance and the Cost of Equity Capital

  title={Corporate Governance and the Cost of Equity Capital},
  author={Hollis Ashbaugh Skaife and Daniel W. Collins and Ryan LaFond},
  journal={Capital Markets: Asset Pricing \& Valuation},
Separation of ownership and control in firms creates information asymmetry problems between shareholders and managers that expose shareholders to a variety of agency risks. This paper investigates the extent to which governance attributes that are intended to mitigate agency risk affect firms' cost of equity capital. We examine governance attributes along four dimensions: (1) financial information quality, (2) ownership structure, (3) shareholder rights, and (4) board structure. We find that… Expand
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