Properties of implied cost of capital using analysts’ forecasts

By W. Guay, S. Kothari, Susan Shu. 2011

313 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/02c76e717947f2b8f552ddcf8e15c9e6506d1ee7

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Christian Leuz
2. Omrane Guedhami
3. Peter D. Wysocki
4. Martin Walker
5. Luzi Hail
6. Sadok El Ghoul
7. Hans B. Christensen
8. David F. Larcker

In Finance

1. Christian Leuz
2. Omrane Guedhami
3. Sadok El Ghoul
4. Luzi Hail
5. Hans B. Christensen
6. Dev R. Mishra
7. David F. Larcker
8. Rodrigo S. Verdi

In Strategy and Management

1. Christian Leuz
2. Omrane Guedhami
3. Martin Walker
4. Peter D. Wysocki
5. Luzi Hail
6. Hans B. Christensen
7. Dev R. Mishra
8. Sadok El Ghoul

Citations in the corpus

• When Does Information Asymmetry Affect the Cost of Capital (2011, background): “…cost of capital measures are an alternative proxy for expected returns, and there is an ongoing debate in the literature about the use of future returns versus implied cost of capital as a proxy for expected returns (e.g., Easton and Monahan, 2005; Guay, Kothari, and Shu, 2006; McInnis, 2010).”
• Corporate Environmental Responsibility and the Cost of Capital: International Evidence (2016, background): “…(measured 6 months after the fiscal year end instead of 10 months after the fiscal year end) following Guay et al. (2005) and Hail and Leuz (2006), and controlling for price momentum estimated as compound stock returns over the past 6 months following Guay et al. (2005) and Chen et al. (2009).”
• Estimating the Cost of Capital Implied by Market Prices and Accounting Data (2009, methodology): “Guay et al. (2005) use correlations with realized returns to gauge this effectiveness but they do not control for the correlated omitted variables, which Easton and Monahan (2005) argue is imperative.”
• Adopting a Label: Heterogeneity in the Economic Consequences Around IAS/IFRS Adoptions (2013, background): “The mean cost of capital for firms following 16 We recognize that there is a debate about the empirical validity of implied cost of capital estimates (Botosan and Plumlee, 2005; Easton and Monahan, 2005; Guay et al., 2005; Pastor et al., 2006).”
• Agency Costs of Free Cash Flow and the Effect of Shareholder Rights on the Implied Cost of Equity Capital (2010, unknown): “, Lombardo and Pagano (2002a), Merton (1987)) suggest that shareholder rights directly affect the cost of equity and therefore should be directly included in equation (1).”
• Political connections and the cost of equity capital (2012, unknown): “Accordingly, Botosan and Plumlee (2005) find that kGLS is inconsistently associated with some risk proxies, while Guay et al. (2005) find kGLS to be the best predictor of expected returns.”
• On the Use of Instrumental Variables in Accounting Research (2010, background): “For example, Leuz and Verrecchia (2000), Hail (2002), and Brown and Hillegeist (2007) find the expected negative relation between their disclosure proxies and selected measures for the cost of capital (or information asymmetry) after using IV”
• Does Religion Matter to Equity Pricing? (2012, unknown): “The rCT and rGLS estimates are slightly lower than those for rOJN and rMPEG, which reinforces recent rankings of the individual equity premium estimates (e.g., Guay et al. 2011).”