Management Forecasts, Regulation FD, Information Asymmetry and the Cost of Debt

2013 ◽  
Author(s):  
Boyoung Kim ◽  
Kyoungwon Mo
Keyword(s):  
Information Asymmetry ◽  
Cost Of Debt ◽  
Management Forecasts ◽  
Regulation Fd ◽  
The Cost

scholarly journals Media Coverage and the Cost of Debt

2019 ◽  
Vol 55 (2) ◽  
pp. 429-471 ◽  
Author(s):  
Haoyu Gao ◽  
Junbo Wang ◽  
Yanchu Wang ◽  
Chunchi Wu ◽  
Xi Dong
Keyword(s):  
Information Asymmetry ◽  
Media Coverage ◽  
Default Risk ◽  
Cost Of Debt ◽  
Yield Spreads ◽  
Negatively Associated ◽  
Economic Mechanisms ◽  
The Cost ◽  
Yield Determinants ◽  
Firm Attributes

This paper investigates the relation between media coverage and offering yield spreads using a comprehensive dataset of 5,338 industrial bonds issued from 1990 to 2011. We find that media coverage is negatively associated with firms’ cost of debt. This association is robust to controlling for standard yield determinants, different model specifications, and endogeneity. We identify 4 economic channels through which media coverage influences the cost of debt: Information asymmetry, governance, liquidity, and default risk. Importantly, media coverage has an independent influence beyond the effects of these economic mechanisms and is not a proxy for other firm attributes.

Information Asymmetry, the Cost of Debt, and Credit Events

2012 ◽  
Author(s):  
Francois Derrien ◽  
Ambrus Kecskes ◽  
Sattar Mansi
Keyword(s):  
Information Asymmetry ◽  
Cost Of Debt ◽  
The Cost

How do Corporate Governance Decisions Affect Bondholders?

2016 ◽  
Vol 06 (03) ◽  
pp. 1650011 ◽  
Author(s):  
Hong Li ◽  
Yuan Wang
Keyword(s):  
Corporate Governance ◽  
Information Asymmetry ◽  
Agency Costs ◽  
Negative Relationship ◽  
Selection Effect ◽  
The Self ◽  
Cost Of Debt ◽  
Governance Mechanisms ◽  
Self Selection ◽  
The Cost

Existing studies have documented a negative relationship between the GIM corporate governance index (which contains anti-takeover provisions) and the corporate cost of debt, which implies that fewer anti-takeover provisions may lead to a larger shareholder expropriation of bondholder wealth. That is, strong corporate governance hurts bondholders (asset substitution hypothesis). However, another stream of research asserts that governance mechanisms may benefit bondholders by paring down agency costs and decreasing information asymmetry between the firm and the lenders (monitoring hypothesis). We reexamine this issue by considering the self-selection effect. We find that both hypotheses can be true, and that firms consider the reduction of cost of debt when self-selecting their governance, and the cost of debt would have been much higher had the alternative governance decision been made.

Investor Protection, Firm Informational Problems, Big N Auditors, and Cost of Debt around the World

2013 ◽  
Vol 32 (3) ◽  
pp. 1-30 ◽  
Author(s):  
Ferdinand A. Gul ◽  
Gaoguang (Stephen Zhou ◽  
Xindong (Kevin Zhu
Keyword(s):  
Information Asymmetry ◽  
Lower Cost ◽  
Investor Protection ◽  
Cost Of Debt ◽  
Firm Age ◽  
The World ◽  
Size Firm ◽  
Using Data ◽  
The Cost ◽  
Jel Classifications

SUMMARY: This paper examines the effects of investor protection, firm informational problems (proxied by firm size, firm age, and the number of analysts following), and Big N auditors on firms' cost of debt around the world. Using data from 1994 to 2006 and over 90,000 firm-year observations, we find that the cost of debt is lower when firms are audited by Big N auditors, especially in countries with strong investor protection. Second, we find that firms with more informational problems (i.e., higher information asymmetry problems) benefit more from Big N auditors in terms of lower cost of debt only in countries with stronger investor protection. JEL Classifications: G14; G15; G32; K22; M42.

Sign in / Sign up

Export Citation Format

Share Document