• The Journal of Asian Finance, Economics and Business
• /
• 제8권4호
• /
• pp.769-776
• /
• 2021

The focus of this study is to investigate the effect of earnings management and audit quality on the cost of equity capital and also examines whether audit quality acts as a moderating variable for the effect of earnings management on the cost of equity capital. The population in this study are companies from the consumer goods industry sector listed on the Indonesia Stock Exchange (IDX) during the 2016-2018 period. This sector was chosen because it is a sector that is able to survive in conditions of economic decline, so it becomes a good investment opportunity in the future. The sample selection was carried out using purposive sampling technique. By using the Moderated Regression Analysis (MRA) technique, the results show that earnings management has a positive effect on the cost of equity capital. Conversely, companies with good audit quality will bear lower cost of equity capital. The moderating hypothesis test results show that audit quality moderates the effect of earnings management on the cost of equity capital. This means that, even though the company carries out earnings management, investors have more confidence in the results of audits conducted by qualified auditors so that the cost of equity capital is low.

• 산경연구논집
• /
• 제12권11호
• /
• pp.9-16
• /
• 2021

Purpose: Carbon emissions have now become a major concern around the world, especially for the government and private sector. Unfortunately, in Indonesia, disclosure related to company carbon emissions is still done voluntarily. This research aims to provide empirical evidence on the effect of environmental performance, carbon emission disclosure, and carbon emission intensity on the cost of equity capital. Research design, data, and methodology: This research uses secondary data with a sample consisting of Indonesia companies that are sensitive to the environment and listed on the Indonesia Stock Exchange in 2017-2019. The analytical tool used in this research was multiple regression models. Result: The study found a carbon emission disclosure had a significant positive effect on the cost of equity capital. Carbon emission intensity and company size had a significant negative effect on the cost of equity capital. Meanwhile, environmental performance did not have a significant effect on the cost of equity capital. Conclusion: Therefore, the results of this research are expected to provide feedback to the company's stakeholders that environmental performance and carbon emissions are some of the points seen by investors in making investment decisions.

• The Journal of Asian Finance, Economics and Business
• /
• 제7권7호
• /
• pp.149-158
• /
• 2020

The purpose of this study was to investigate the impact of corporate governance index on the cost of equity in companies listed on the Tehran Stock Exchange. This study collects data from 975 observations during the period 2012 to 2018 to test the hypotheses using multiple linear regression model for the panel data. In this research, the independent variable of corporate governance index comprises of 27 specific corporate governance attributes. The results of hypothesis testing showed that corporate governance has a negative and significant effect on the rate of capital cost. In other words, the quality of corporate governance can lower the rate of capital cost. This result suggests that, by using a powerful corporate governance system and by declining the information asymmetry (increasing transparency) and agency conflict, we would be able to enhance the quality of financial reports. It would strengthen the capital market, attract financial suppliers and investors, and absorb the required financial resources of the firm by a lower rate. The findings of the study suggest that companies are able to reduce the cost of equity by establishing strong corporate governance. This conclusion suggests the importance and effectiveness of corporate governance in the cost of equity.

• 한국벤처창업학회:학술대회논문집
• /
• 한국벤처창업학회 2023년도 추계학술대회
• /
• pp.69-71
• /
• 2023

The Modigliani-Miller Proposition II (MM2) is a cornerstone in the field of corporate finance, positing that in a frictionless environment with perfect capital markets, the cost of equity capital is linearly related to a firm's leverage. This paper critically re-evaluates this proposition, particularly examining the determination of the cost and value of equity. We find that under specific circum-stances, especially when the value of a tax shield is influenced by endogenous variables, the cost and value of equity may be ambiguous. This calls into question the universal applicability of MM2. Our research offers new perspectives on the theoretical underpinnings of financial management and underscores the significance of situational factors in the practical application of these theories.

• The Journal of Asian Finance, Economics and Business
• /
• 제4권3호
• /
• pp.5-17
• /
• 2017

This study extends research into whether disclosure of corporate and financial information is associated with firms' costs of equity capital. This study sets out to examine empirically the determinants of corporate disclosure in the annual reports of 37 largest and most liquid firms listed on Kazakhstan Stock Exchange (KASE) in Kazakhstan. It also reports the results of the association between company-specific characteristics and disclosure of the sample companies. Based on the analysis of existing empirical research, the disclosure index has been constructed and regression analysis of the influence of the disclosure index on the cost of equity capital has been conducted. The obtained results show that the received findings correlate with foreign empirical studies, and the disclosure index in this sample has a negative impact on the cost of equity capital. Using cost of equity capital estimates derived from capital asset pricing model, we find that firms with higher levels of financial transparency are associated with significantly lower costs of equity capital. Economic theory assumes that by increasing the level of corporate reporting, firms not only increase their stock market liquidity, but also decrease the investors' estimation risk, arising from uncertainty about future returns and payout distributions. The results show that firms on the Kazakhstan market can reduce their cost of equity capital by increasing the level of their voluntary corporate disclosures.

• Industrial Engineering and Management Systems
• /
• 제12권2호
• /
• pp.143-150
• /
• 2013

The number of airline passengers in China has rapidly increased, so understanding the relationship between brand equity of airlines in China and ticket purchase intention of Chinese passengers is important for airline business success in China. Using the structural equation modeling, this study explores the relationships among determinants of brand equity as well as the relationships between brand equity, transition cost, and purchase intention. The major findings are: brand equity of airlines directly influences purchase intention; transition cost directly influences brand equity; and transition cost indirectly influences purchase intention in China. In addition, the results show that marketing strategies using the airline brand can be more effective for certain customer groups, including high income customers, married customers, government servants, and businessmen.

• 유통과학연구
• /
• 제10권11호
• /
• pp.79-88
• /
• 2012

Purpose - The objective of this paper is to suggest that a company's CRM activities have an effect on customer loyalty in the Korean retail industry. Typically, Korean customers use large local marts with convenience in the absence of any other choice. Therefore, this study aims to shed light on the fact that customers do not break away from their preferred retail stores, either owing to their stringent loyalty (the lie loyalty) or difficulty in turning to alternative choices. Research design, data, methodology - By surveying a sample of 200 hyper-markets through a questionnaire, and excluding dubious and missing responses, I obtained 181 samples to be included in the empirical analysis. The survey was conducted for two weeks during October 2011. AMOS and SPSS18 statistical packages were used for conducting statistical analysis for this study. This paper was developed using the concept of customer equity on CRM, which is known to have a positive impact on customer loyalty through the satisfaction and switching-barrier parameters. The hypothesis of this paper is that customer equity is composed of relationship equity, value equity and brand equity, and that the relationship equity variable has positive effects on the value equity and brand equity amongst other types of customer equity. Moreover, customer equity influences customer loyalty through parameters including customer satisfaction and switching costs in the Korean retail industry. Results - According to the results of the analysis, it was confirmed that relationship value had a positive effect (+) on all variables, including the perceived QoS (Quality of Service), store brand images, economic value, and store convenience. It was also confirmed that the assumption that the perceived QoS (Quality of Service), economic value, and store convenience had a positive effect on customer satisfaction was shown to be statistically significant, with a p-value below 0.05. Only the store brand value variable had an effect on the switching-cost variable with respect to the causal sequence of the variables, including the perceived QoS, store brand value, economic value, and store convenience. The remaining variables did not seem to influence the switching-cost variable. On the other hand, another effect showed that customer satisfaction had a statistically significant influence on the switching-costs variable. Moreover, the customer satisfaction and switching-cost variables also had a statistical influence on customer loyalty. Conclusions - The CRM activities had an influence on various variables (including perceived QoS, perceived economic value, store brand value, and store convenience) pertaining to customer values. Customer satisfaction and switching-cost had some effects on customer loyalty as a parameter. This confirms that stringent loyalty exists with respect to customer loyalty in the retail industry. The fact that the variable had such a statistically significant influence on the switching-cost and store brand equity variables means that consumers react to the reputation of a brand, confidence about the store, and quality confidence. The implications of this study in the retail industry should be further extended to devise strategies for customer retention.

• 한국융합학회논문지
• /
• 제8권3호
• /
• pp.225-235
• /
• 2017

기업은 자기주식을 시장에서 직접 취득하는 방법과 신탁계약을 통한 간접 취득방법을 선택할 수 있는데, 두 방식에는 제도적인 차이가 존재하며, 따라서 자기주식을 취득하는 두 방식은 시장에 서로 다른 신호를 전달할 수 있다. 본 논문은 자사주 매입 방법과 추정자기자본비용(ICOE) 사이의 관계를 실증적으로 분석하였고, 연구의 결과는 다음과 같다. 첫째, 자사주 매입을 공시한 기업의 자기자본비용이 자사주 매입을 공시하지 않은 기업의 자기자본비용보다 통계적으로 유의미한 수준에서 낮게 나타났다. 이 결과는 여유현금흐름가설이나 자사주 매입이 체계적 위험과 투자지출의 감소에 따라 자기자본비용이 감소한다는 주장과 일치한다. 둘째, 자기주식을 직접 취득한 기업은 간접 취득한 기업에 비해 통계적으로 유의미하게 낮은 자기자본비용을 가지는 것으로 나타났다. 이러한 결과들은 시장참여자들이 서로 다른 자사주 매입 방식이 가지는 융합적 신호효과를 정확히 판단하여 이를 자기자본비용에 적절히 반영한다는 것이다.

• Asia Pacific Journal of Business Review
• /
• 제4권1호
• /
• pp.1-34
• /
• 2019

This study investigates whether and how a firm's cost of equity capital is influenced by the extent of a firm's real earnings management (REM). Using a large sample of Hong Kong and Chinese firms over the 9-year period 2009-2017, we find that our implied cost of equity estimates are positively associated with both the extent of REM and the extent of accrual-based earnings management (AEM), but the positive association is stronger for REM than for AEM. We also provide evidence suggesting that the effect of AEM and REM on the cost of equity is more pronounced for Hong Kong firms than Chinese firms, and within Chinese firms, it is less pronounced for the state-owned enterprises (SOEs). Collectively, our results suggest that while both REM and AEM exacerbate the quality of earnings used by outside investors, REM does so to a greater extent than AEM, and thus the market demands a higher risk premium for REM activities than for AEM activities and that this cost of capital-increase effect is more prominent in a developed market like Hong Kong and mitigated by state ownership in China because of investors' expectations for a lower level of detriments to firm fundamentals by REM due to government's protection in a less developed market like China.

• 경영과정보연구
• /
• 제33권4호
• /
• pp.21-38
• /
• 2014

기업의 상호는 기업의 성공적인 수많은 요인 중에서도 타기업과 경쟁기업을 차별화시키는 무형의 자산으로 기업의 이미지와 강하게 관련되어 있다고 볼 수 있다(Akerlof, 1970). 지금까지 상호변경에 관한 연구는 기업가치에 긍정적인 영향을 미친다는 연구와 부정적인 영향을 미치거나 영향을 미치지 않는다는 연구로 대별된다. 긍정적인 영향을 미친다는 연구는 상호변경이 투자자의 투자욕구에 영향을 미치거나 미래현금흐름에 대한 투자자의 기대를 변하게 하는 신호로 작용하여 기업가치가 증가한다는 것이다. 상호변경 자체가 기업 내외의 이해 관계자들에게 긍정적인 신호로 작용하여 기업의 미래가치를 높일 수 있고 이러한 신호효과가 신뢰성이 높다면 투자자들의 정보비용을 절감시켜 정보비대칭이 감소함으로서 내재자본비용의 감소를 가져올 수 있다. 한편, 반대되는 연구결과로 부정적인 성과를 오도하기 위해 상호를 변경하는 경우 시장에 악재로 작용할 수 있으며 도리어 상호변경에 수반되는 추가적인 비용으로 인하여 주가에 부정적인 영향을 미친다는 연구와 시장균형하에서 상호변경은 기업가치에 어떠한 영향도 미치지 않는다는 연구이다. 상호변경이 기업이미지 개선, 합병 등 과거와의 단절 및 기업이미지 세탁을 위하여 이루어진다면 상호변경 자체에 대해 투자자들은 조심스럽게 받아들일 수밖에 없다. 즉 시장의 관점에서 보면 기업의 상호변경에 대하여 기업의 내재가치 및 이와 관련된 정보의 비대칭성이 크다는 특성을 가지며 새로운 상호로의 교체가 위험을 의미한다면 상대적으로 기업과 기업외부의 이해관계자들과의 정보비대칭이 증가함으로서 정보위험에 대한 대가로 기업의 내재자본비용은 증가할 수밖에 없다. 이렇듯 현재까지 상반된 연구결과가 존재하는 상황에서 본 연구는 2005년부터 2010년까지 국내 유가증권시장 상장기업을 대상으로 상호변경이 내재자본비용에 미치는 영향을 분석한다. 분석결과, 상호변경은 내재자본비용에 유의적인 양(+)의 영향을 미치는 것으로 나타났다. 이러한 결과는 상호변경은 경영자와 외부투자자자간의 정보비대칭을 증가시키고 이에 대해 시장에서는 정보위험에 대한 추가적인 위험프리미엄을 요구한다고 볼 수 있다. 결과적으로 상호가 기업에 대한 인지도 및 신뢰성의 척도로 작용하여 상호변경이 투자자들의 정보비용을 절감시키는 효과보다 상호변경을 미래에 대한 불확실성이라는 위험으로 인지하여 추가적인 프리미엄을 요구하고 있는 것으로 나타났다.