• Journal of the Korea Convergence Society
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• v.8 no.3
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• pp.225-235
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• 2017

Firms employ one of two stock repurchasing methods, either direct open market repurchase or indirect repurchase through trust contracts. Since these two methods have some regulatory differences, managers of firms may use a repurchasing method as a signal to convey the information to the market. Therefore, this study investigates the relationship between stock repurchasing methods and implied cost of equity of firms. The results show that there is a significant and negative relationship between stock repurchase announcement and cost of equity. In addition, the implied cost of equity for firms employing direct open market repurchase is significantly lower than those of firms that use indirect repurchase method. Overall, the market accurately reflects the information conveyed by two stock repurchasing methods into cost of equity of firms.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.20 no.6
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• pp.483-488
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• 2019

This study first examines whether the high matching principle reduces the cost of equity, and then examines the effect on discretionary accruals and capital cost. According to previous studies, the higher the response to revenue cost, the higher the earnings quality. The higher the quality of earnings, the lower the information risk, and the lower the information risk, the lower the capital cost of enterprise. Discretionary accruals can play two roles in opposing each other. One is that managers use the discretionary accruals to provide private information about the future of the corporation to the market, thus enhancing the usefulness of the earnings. The other is that managers can use the discretionary accruals opportunistically to distort earnings and provide misinformed information to investors, thus reducing the usefulness of earnings. The results of this study represents that the higher the responding to the revenue cost, the less the cost of equity. In the case of firms with high revenue response, we examine whether discretionary accruals reduce the cost of equity capital. As a result of the study, the higher the responding to the revenue cost, the lower the cost of equity capital. Companies with higher matching principle have been shown to reduce their capital costs by using discretionary accruals.

• International Area Studies Review
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• v.13 no.2
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• pp.505-523
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• 2009

We study the cost of capital of Islamic enterprise using the Capital Asset Pricing Model(CAPM). When there exists no risk-free interest rate, the security market line(SML) of Islamic enterprise shows an upward slope starting from the origin. The slope is bigger than that of SML with risk-free interest rate. This is because the cost of capital of Islamic enterprise is higher than that of western firms for the same level of systematic risk. When the effect of zakat is considered, the risk-free interest rate is replaced by minimum required rate of return. The SML of Islamic enterprise reveals an upward slope but it does not pass through the origin. This is because Islamic enterprise cannot invest on risk-free asset. In order to overcome the theoretic limits of CAPM, we propose to use multi-factor approach such as arbitrage pricing model instead of single-factor model for future study.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.18 no.5
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• pp.543-548
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• 2017

This paper examines the effects of strong corporate governance for listed companies in accessing capital markets from the point of view of the weighted average cost of capital. Results found that corporate governance had a significant negative(-) relation to the weighted average cost of capital. This finding is consistent with previous research and implies that the higher shareholder ownership and foreign ownership have confidence in the financial information of the company, and therefore, risk is reduced for investors. This results in lower expected rates of return and companies will pay a lower cost of capital. Second, tax evasion had a positive effect(+) on the weighted average cost of capital. The low quality of corporate accounting information is expected to increase tax avoidance. Accordingly, this results in increased risk. If the required rate of return is high in its impact,it leads to increased capital costs. In addition, corporate governance and tax avoidance factors showed a negative affect (-) on the weighted average cost of capital. Corporate governance plays an important role in tax avoidance and the weighted average cost of capital, and strong corporate governance reducesthe impact on tax avoidance. In addition, the weighted average cost of capital in capital markets showed the reducing effect.

• Journal of Navigation and Port Research
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• v.48 no.3
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• pp.200-205
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• 2024

This paper examines the impact of ESG activities of domestic shipping companies on the cost of debt. It is known that companies with large information asymmetry tend to have high costs of debt. Corporate ESG activities have been identified as an effective means of reducing information asymmetry. By actively engaging in ESG activities, companies can lower the cost of debt by reducing information asymmetry. Therefore, this study aims to investigate whether these mechanisms, which have been observed in previous studies, also apply to domestic shipping companies. Multiple regression analysis is conducted on KOSP I-listed shipping companies from2010 to 2022. The cost of debt is set as the dependent variable, while the ESG rating is used as the explanatory variable. The analysis reveals that companies with a high level of ESG activities generally have a lower cost of debt. However, it is important to note that ESG activities of shipping companies do not seem to have a significant impact on their cost of debt. In fact, the level of ESG activities among domestic shipping companies is not particularly high (Hong, 2024). Despite these findings, domestic shipping companies should still strive for sustainable management to adapt to the rapidly changing business environment and meet the demands of the modern era. ESG management is a representative method for achieving sustainability. Therefore, shipping companies should not only focus on reducing the cost of debt but also on opening up the closed industry culture and communicating with capital market participants for sustainable growth. It is crucial for these companies to listen to the voices of stakeholders and embrace a holistic approach to sustainability.

• Journal of Korea Technology Innovation Society
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• v.9 no.1
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• pp.175-198
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• 2006

Analyzing the effects of information technology(IT) in the life insurance Industry is important in establishing the direction for future information technology investment. In this research, the cost-elasticity of IT capital stock was measured by the SUR technique, using the second-order translog cost function, which was drawn out by a Taylor expansion of the multi-product joint cost function. Analysis was made based on data from 1991 to 2003 collected from 33 life insurance firms. The results show that although the effects of information technology investment vary according to individual life insurance firms, half of the life insurance firms surveyed reduced their costs by investing in information technology. The research also revealed that although large life insurance firms reduced their costs by investing in information technology medium & small life insurance firms and foreign ,life insurance firms increase their costs. Additionally, although both information capital and information labor increase as the information budget increases, the increase in information capital is larger than one in information labor. Because the price of information capital is decreased rapidly more than one of information-related labor.

• Journal of Korea Port Economic Association
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• v.29 no.2
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• pp.19-38
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• 2013

This paper explores the relationship between shipping firm's investment and debt-ratio characteristics. Using a panel of 41 shipping firms from 2006 to 2011, this study finds evidence that debt/asset ratio and leverage are negatively associated with firm's investment activities. This relationship shows that volume of debt and capital structure are critical decision factor on firm's investment and capital financing. In terms of financial expenses to sales, positive relationship is existed with firm's investment finding that financing cost is important to investment. The previous study of the firm's investment in other sector also shows a negative relationship with debit ratio. This study is also interested in the extent to which the firm's investment is affected by firm size because there is general agreement that smaller firms have less access to external capital markets. As results, smaller companies group have more positive relationship with factors related to financing cost such as financial expenses to sales and tax. On the other hand, bigger companies group shows the evidence that firm investment is positive relationship with asset size. The analysis corresponding to economic fluctuation shows that debit ratio is more sensitive to firm's investment during a recession. On the other hand, financial expenses to sales is more related to firm's investment during an economic boom.

• 한국산학경영학회:학술대회논문집
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• 2004.11a
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• pp.55-72
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• 2004

Before 2003 the companies In Korea should capitalize the interest expenses that are attributable to the acquisition, construction or production of a qualifying assets. However, according to the revised standard which should be applied from 2003, the companies can either capitalize the interest expenses or recognize as an expense when they are incurred. Therefore almost all the companies confronted with the decision making of accounting choices on the interest capitalization. This paper empirically examines which financial characteristics of the companies affect the accounting choice by using logistic regression model and reviews the sufficiency of the foot notes disclosures regarding the capitalized interest. The variables of the financial characteristics are change of debt-equity ratio, borrowing ratio, qualifying assets ratio, firm sire and income smoothing. The results of this study are summarized as follows. First, among the financial characteristics, only qualifying asset ratio has the significant difference between capitalized companies and expensing companies. Second, the results of logistic regression indicate that qualifying asset ratio and firm size have the significant influence on the accounting choices. Therefore, I cannot find the evidence supporting that the companies use the accounting choice to manage the financial ratios.

• Environmental and Resource Economics Review
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• v.8 no.1
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• pp.75-94
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• 1998

철강산업에 있어서 공해저감시설의 설치와 증 개축시 발생하는 제반 문제점과 함께 불완전한 시장과 제약된 경영여건하에서 각 기업들은 주어진 요소의 시장가격으로 생산비용 최소화의 실현과 더불어 합리적이며 효율적인 생산활동을 하고 있다고는 할 수 없다. 본 연구에서는 한국 철강산업을 대상으로 일반비용 함수 방식에 의한 계수검정을 실시하여 공해저감시설 또는 자본을 포함한 각 생산요소의 상대가격 효율성 달성 여부를 알아본다. 그리고 비효율성으로 인한 생산비용의 상승효과를 측정하고 공해저감자본의 실제 투입량과 적정수준과의 차이를 측정하여 공해저감자본에 대한 적정 투입률을 분석한다. 측정 결과, 상대가격의 비효율성으로 인하여 1982년부터 1994년까지의 기간 동안 철강산업의 생산비용이 연평균 약 13.6% 증가되었으며 공해저감자본은 적정수준에 비해 연평균 48.4% 적게 투입된 것으로 나타났다.

• International Area Studies Review
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• v.20 no.4
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• pp.57-72
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• 2016

This Paper investigates the role of wealth distributions and Financial institutions of an economy on within-industry firm heterogeneity in productivity. If there is no Financial imperfection so that entrepreneurs are not constrained in borrowing all of them make the same, productivity-enhancing investment. International Trade industry average productivity also increases the avoidance of capital and international capital movements developing countries linked by lead industry cuts in global investing. International Trade of goods, on the other hand, amplifies this impact of capital mobility when capital structures the countries.