Agency Costs of Free Cash Flow and the Effect of Shareholder Rights on the Implied Cost of Equity Capital

By Kevin C. W. Chen, Zhihong Chen, Kuo-chiang Wei. Journal of Financial and Quantitative Analysis, 2010

286 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/eea852040fdfa04adaf561949f9305cd3b708692

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Citations in the corpus

Corporate Environmental Responsibility and the Cost of Capital: International Evidence (2016, background): “Additionally, this accounting-based approach does not require a long time series of past returns, it does not make a priori assumptions about market integration, and it attempts to separate cash flow and growth effects from the cost of equity effects (Hail and Leuz, 2009; Chen et al., 2011).”
Customer Concentration Risk and the Cost of Equity Capital (2016, methodology): “However, similar to other studies (e.g., Ashbaugh-Skaife et al., 2009; Chen, Chen, and Wei, 2011), we control for both types of risk in our cost of equity regressions.”
Executive Pay Disparity and the Cost of Equity Capital (2013, methodology): “…planning importance = 2.70 2.69 CPS× High CEO succession planning importance (b3 = b4) (0.101) (0.101) The previous finding is consistent with that of Chen et al. (2011) that shareholders charge a higher risk premium for firms with weak shareholder rights when the agency problem of free cash…”
The dark side of CEO ability: CEO general managerial skills and cost of equity capital☆ (2014, unknown): “, 2007; Chen et al., 2011). Moreover, May (1995) argues that human capital becomes more firm-”
Auditor Choice in Politically Connected Firms (2014, unknown): “accounting and finance literature (see, for example, Hail and Leuz, 2006; Chen et al., 2011), it is beset by two main limitations stressed by these same studies.”
Directors׳ and officers׳ liability insurance and the cost of equity☆ (2016, background): “These determinants of D&O insurance are potentially correlated with the cost of equity (e.g., Ashbaugh-Skaife et al., 2005; Chen et al., 2011).”
Policy uncertainty, investment, and the cost of capital (2018, unknown): “11 More specifically, following prior literature (Hail and Leuz, 2006; Chen et al., 2011; Hou et al., 2012; Barth et al., 2013), we calculate KEquity as the arithmetic average of the ICC measures of Claus and Thomas (2001; KCT), Ohlson and JuettnerNauroth (2005; KOJN), Easton (2004; KMPEG), and Gebh”
ESG practices and the cost of debt: Evidence from EU countries (2019, background): “Also, to mitigate the issue of reverse causality (i.e., the cost of debt in the previous period affects current ESG investment), we follow El Ghoul, Guedhami, Kwok, and Mishra (2011) and Chen, Chen, and Wei (2011) and include the lagged cost of debt as an independent variable.”
Does Religion Matter to Equity Pricing? (2012, unknown): “For equity pricing, we follow Hail and Leuz (2006) and Chen et al. (2011), among others, by analyzing firms’ ex ante cost of equity premium implied by current stock prices and analysts’ earnings forecasts.”
The Global Financial Crisis, Family Control, and Dividend Policy: The Global Financial Crisis, Family Control, and Dividend Policy (2016, unknown): “…family control and dividends, we begin by examining the extent to which family firms with more pronounced agency problems—that is, high free cash flows and few investment opportunities (e.g., Lang, Stulz, and Walkling, 1991; Chen, Chen, and Wei, 2011)— pay lower dividends than other firms (H2).”
Does corporate social responsibility affect the cost of capital (2011, methodology): “In particular, prior research suggests that firm-level corporate governance, analyst following, and financial constraints are correlated with both CSR and the cost of equity (Brown et al., 2006; Chen et al., 2009a; Barnea and Rubin, 2010).”