Cost of Capital Bibliography

Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida



Cost of Capital Main Page

Aboody, D., J. Hughes and J. Liu. 2005. Earnings quality, insider trading, and cost of capital. Journal of Accounting Research (December): 651-673.

Alsadoun, N., V. Naiker, F. Navissi and D. S. Sharma. 2018. Auditor-provided tax nonaudit services and the implied cost of equity capital. Auditing: A Journal of Practice & Theory 37(3): 1-24.

Armstrong, C. S., J. Core, D. J. Taylor and R. E. Verrecchia. 2011. When does information asymmetry affect the cost of capital? Journal of Accounting Research (March): 1-40.

Ashbaugh-Skaife, H., D. W. Collins, W. R. Kinney, Jr. and R. Lafond. 2009. The effect of SOX internal control deficiencies on firm risk and cost of equity. Journal of Accounting Research (March): 1-43.

Ashton, D. and P. Wang. 2013. Terminal valuations, growth rates and the implied cost of capital. Review of Accounting Studies 18(1): 261-290.

Attig, N. and S. E. Ghoul. 2018. Organization capital and the cost of equity financing in medium sized manufacturing firms. Contemporary Accounting Research 35(3): 1616-1644.

Azizkhani, M., G. S. Monroe and G. Shailer. 2013. Audit partner tenure and cost of equity capital. Auditing: A Journal of Practice and Theory 32(1): 183-202.

Bacidore, J. M., J. A. Boquist, T. T. Milbourn and A. V. Thakor. 1997. The search for the best financial performance measure. Financial Analysts Journal (May/June): 11-20. (Summary).

Baginski, S. P. and K. C. Rakow. 2012. Management earnings forecast disclosure policy and the cost of equity capital. Review of Accounting Studies 17(2): 279-321.

Baginski, S. P. and L. A. Hinson. 2016. Cost of capital free-riders. The Accounting Review (September): 1291-1313.

Balakrishnan, K., L. Shivakumar and P. Taori. 2021. Analysts' estimates of the cost of equity capital. Journal of Accounting and Economics (April-May): 101367.

Ball, R., G. Sadka and R. Sadka. 2009. Aggregate earnings and asset prices. Journal of Accounting Research (December): 1097-1133.

Ball, R. T., L. Hail and F. P. Vasvari. 2018. Equity cross-listings in the U.S. and the price of debt. Review of Accounting Studies 23(2): 385-421.

Bao, M. X., M. T. Billett, D. B. Smith and E. Unlu. 2020. Does other comprehensive income volatility influence credit risk and the cost of debt? Contemporary Accounting Research 37(1): 457-484.

Barron, O. E. and H. Qu. 2014. Information asymmetry and the ex ante impact of public disclosure quality on price efficiency and the cost of capital: Evidence from a laboratory market. The Accounting Review (July): 1269-1297.

Barth, M. E., Y. Konchitchki and W. R. Landsman. 2013. Cost of capital and earnings transparency. Journal of Accounting and Economics (April-May): 206-224.

Baxter, W. T. and N. H. Carrier. 1971. Depreciation, replacement price, and cost of capital. Journal of Accounting Research (Autumn): 189-214.

Ben-Nasr, H., N. Boubakri and J. Cosset. 2012. The political determinants of the cost of equity: Evidence from newly privatized firms. Journal of Accounting Research (June): 605-646.

Bertomeu, J. 2013. Discussion of Earnings manipulation and the cost of capital. Journal of Accounting Research (May): 475-493.

Bertomeu, J. 2015. Incentive contracts, market risk, and cost of capital. Contemporary Accounting Research 32(4): 1337-1352.

Bertomeu, J. 2016. Diagnostics to evaluate cost of capital measures. Discussion of Christodoulou et al. Abacus 52(1): 211-219.

Bertomeu, J. and E. Cheynel. 2016. Disclosure and the cost of capital: A survey of the theoretical literature. Abacus 52(2): 221-258.

Bertomeu, J., A. Beyer and R. A. Dye. 2011. Capital structure, cost of capital, and voluntary disclosures. The Accounting Review (May): 857-886.

Bhattacharya, N., F. Ecker, P. M. Olsson and K. Schipper. 2012. Direct and mediated associations among earnings quality, information asymmetry, and the cost of equity. The Accounting Review (March): 449-482.

Bierman, H. Jr. and C. P. Alderfer. 1970. Estimating the cost of capital, a different approach. Decision Sciences 1(1-2): 40-53.

Bloomfield, R. and P. E. Fischer. 2011. Disagreement and the cost of capital. Journal of Accounting Research (March): 41-68.

Boles, K. E. 1986. Implications of the method of capital cost payment on the weighted average cost of capital. Health Services Research (June): 189.

Botosan, C. A. 1997. Disclosure level and the cost of equity capital. The Accounting Review (July): 323-349.

Botosan, C. A. and M. A. Plumlee. 2002. A re-examination of disclosure level and the expected cost of equity capital. Journal of Accounting Research (March): 21-40.

Botosan, C. A., M. A. Plumlee and Y. Xie. 2004. The role of information precision in determining the cost of equity capital. Review of Accounting Studies 9(2-3): 233-259.

Bova, F. 2016. Discussion of Accounting for biological assets and the cost of debt. Journal of International Accounting Research 15(2): 49-51.

Burnett, B. M. 2020. Discussion of the effect of national culture on the relationship between IFRS adoption and cost of equity capital. Journal of International Accounting Research 19(1): 1-3.

Callahan, C. M., R. E. Smith and A. W. Spencer. 2012. An examination of the cost of capital implications of FIN 46. The Accounting Review (July): 1105-1134.

Callen, J. L. 2016. Accounting valuation and cost of equity capital dynamics. Abacus 52(1): 5-25.

Callen, J. L. and M. R. Lyle. 2020. The term structure of implied costs of equity capital. Review of Accounting Studies 25(1): 342-404.

Cao, Y., J. N. Myers, L. A. Myers and T. C. Omer. 2015. Company reputation and the cost of equity capital. Review of Accounting Studies 20(1): 42-81.

Cao, Y., L. A. Myers, A. Tsang and Y. G. Yang. 2017. Management forecasts and the cost of equity capital: International evidence. Review of Accounting Studies 22(2): 791-838.

Chen, H., J. Z. Chen, G. J. Lobo and Y. Wang. 2011. Effects of audit quality on earnings management and cost of equity capital: Evidence from China. Contemporary Accounting Research 28(3): 892-925.

Chen, L. H., S. Deng, P. P. Gupta and H. Sami. 2019. The impact of eliminating the 20-F reconciliation on the cost of debt: An exploratory study. Journal of International Accounting Research 18(1): 47-70.

Chen, S., L. Harris, W. Li and D. Wu. 2015. How does XBRL affect the cost of equity capital? Evidence from an emerging market. Journal of International Accounting Research 14(2): 123-145.

Chen, Z., D. S. Dhaliwal and H. Xie. 2010. Regulation fair disclosure and the cost of equity capital. Review of Accounting Studies 15(1): 106-144.

Chen, Z., O. Z. Li and H. Zou. 2016. Directors' and officers' liability insurance and the cost of equity. Journal of Accounting and Economics (February): 100-120.

Cheynel, E. 2013. A theory of voluntary disclosure and cost of capital. Review of Accounting Studies 18(4): 987-1020.

Christensen, P. O. and H. Frimor. 2020. Public information and efficient capital investments: Implications for the cost of capital and firm values. The Accounting Review (September): 57-93.

Christensen, P. O. and Z. Qin. 2014. Information and heterogeneous beliefs: Cost of capital, trading volume, and investor welfare. The Accounting Review (January): 209-242.

Christensen, P. O., G. A. Feltham and M. G. H. Wu. 2002. "Cost of capital" in residual income for performance evaluation". The Accounting Review (January): 1-23.

Christensen, P. O., L. E. de la Rosa and G. A. Feltham. 2010. Information and the cost of capital: An ex ante perspective. The Accounting Review (May): 817-848.

Christodoulou, D., C. Clubb and S. Mcleay. 2016. A structural accounting framework for estimating the expected rate of return on equity. Abacus 52(1): 176-210.

Chu, L., R. Mathieu and C. Mbagwu. 2018. The association between firm fundamentals and bank interest rates under different measures of risk. Advances in Accounting: Incorporating Advances in International Accounting (41): 46-58.

Clinton, B. D. and S. Chen. 1998. Do new performance measures measure up? Management Accounting (October): 38, 40-43. (Summary).

Copeland, T. 2002. Want to create value? Strategic Finance (March): 48-54. (Expectations based management is a measure of financial performance based on the difference between actual and expected performance. The measurement is [Actual return on invested capital, or ROIC - expected return on invested capital x invested capital] - [Actual weighted average cost of capital, or WACC - expected weighted average cost of capital] + [ROIC - WACC] x [Actual invested capital - expected capital]. See page 53. Illustrations based on Sears vs. Wal-Mart, Chevron Corp, and Coca-Cola Company).

Dai, Z., D. A. Shackelford, H. H. Zhang and C. Chen. 2013. Does financial constraint affect the relation between shareholder taxes and the cost of equity capital? The Accounting Review (September): 1603-1627.

Daly, A. and H. A. Skaife. 2016. Accounting for biological assets and the cost of debt. Journal of International Accounting Research 15(2): 31-47.

Dargenidou, C., S. McLeay and I. Raonic. 2006. Expected earnings growth and the cost of capital: An analysis of accounting regime change in the European financial market. Abacus 42(3-4): 388-414.

Dhaliwal, D., J. S. Judd, M. Serfling and S. Shaikh. 2016. Customer concentration risk and the cost of equity capital. Journal of Accounting and Economics (February): 23-48.

Dhaliwal, D., L. Krull and O. Z. Li. 2007. Did the 2003 Tax Act reduce the cost of equity capital? Journal of Accounting and Economics (March): 121-150.

Dhaliwal, D., L. Krull, O. Z. Li and W. Moser. 2005. Dividend taxes and implied cost of equity capital. Journal of Accounting Research (December): 675-708.

Dhaliwal, D., S. Heitzman and O. Z. Li. 2006. Taxes, leverage, and the cost of equity capital. Journal of Accounting Research (September): 691-723.

Dhaliwal, D. S., O. Z. Li, A. Tsang and Y. G. Yang. 2011. Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting. The Accounting Review (January): 59-100.

Dierks, P. A. and A. Patel. 1997. What is EVA, and how can it help your company? Management Accounting (November): 52-58. (Summary).

Dow, K. E., M. W. Watson and V. J. Shea. 2017. Riding the waves of technology through the decades: The relation between industry-level information technology intensity and the cost of equity capital. International Journal of Accounting Information Systems (25): 18-28.

Easton, P. 2018. Discussion of "The effect of tax haven utilization on the implied cot of equity capital: Evidence from U.S. multinational firms." Journal of International Accounting Research 17(2): 71-73.

Eiteman, D. S. 1967. A closer look at cost of capital. Management Accounting (July): 57-63.

Elliott, G. S. 1980. Analyzing the cost of capital. Management Accounting (December): 12-13, 16-18.

Esposito, E. F. 2013. The cost of capital for middle-market companies: Using middle-market finance theory and Pepperdine Private Capital Markets Project. The CPA Journal (March): 53-56.

Eugster, F. 2020. Endogeneity and the dynamics of voluntary disclosure quality: Is there really an effect on the cost of equity capital? Contemporary Accounting Research 37(4): 2590-2614.

Evans, M. E. 2016. Commitment and cost of equity capital: An examination of timely balance sheet disclosure in earnings announcements. Contemporary Accounting Research 33(3): 1136-1171.

Ezzamel, M. A. 1980. Estimating the cost of capital for a division of a firm and the allocation problem in accounting: A comment. Journal of Business Finance & Accounting 7(1): 65-73.

Feng, M. 2014. Discussion of "Evaluating cross-sectional forecasting models for implied cost of capital." Review of Accounting Studies 19(3): 1186-1190.

Feng. Z., D. S. Sharma, M. Dao and H. Huang. 2023. Global-level auditor industry specialization and the cost of equity capital. Accounting Horizons (September): 117-146.

Fera, N. 1997. Using shareholder value to evaluate strategic choices. Management Accounting (November): 47-51. (Summary).

Fonseka, M., T. Rajapakse and G. L. Tian. 2019. The effect of environmental information disclosure and energy types on the cost of equity: Evidence from the energy industry in China. Abacus 55(2): 362-410.

Fox, R. P. 1984. Why the cost of capital should not be used for capital investment appraisal. Management Accounting UK (May): 22-23.

Francis, J., D. Nanda and P. Olsson. 2008. Voluntary disclosure, earnings quality, and cost of capital. Journal of Accounting Research (March): 53-99.

Francis, J. R., I. K. Khurana and R. Pereira. 2005. Disclosure incentives and effects on cost of capital around the world. The Accounting Review (October): 1125-1162.

Franco, F., O. Urcan and F. P. Vasvari. 2016. Corporate diversification and the cost of debt: The role of segment disclosures. The Accounting Review (July): 1139-1165.

Fuller, R. J. and H. S. Kerr. 1981. Estimating the divisional cost of capital: An analysis of the pure-play technique. The Journal of Finance (December): 997-1009.

Gao, P. 2008. Keynesian beauty contest, accounting disclosure, and market efficiency. Journal of Accounting Research (September): 785-807.

Gao, P. 2019. Idiosyncratic information, moral hazard, and the cost of capital. Contemporary Accounting Research 36(4): 2178-2206.

Gao, P. 2010. Disclosure quality, cost of capital, and investor welfare: 2008 American Accounting Association competitive manuscript award winner. The Accounting Review (January): 1-29.

Gebhardt, W. R., C. M. C. Lee and B. Swaminathan. 2001. Toward an implied cost of capital. Journal of Accounting Research (June): 135-176.

Gode, D. and P. Mohanram. 2003. Inferring the cost of capital using the Ohlson-Juettner model. Review of Accounting Studies 8(4): 399-431.

Goh, B. W., J. Lee, C. Y. Lim and T. Shevlin. 2016. The effect of corporate tax avoidance on the cost of equity. The Accounting Review (November): 1647-1670.

Gois, A. D., G. A. S. Franco de Lima, N. Alves de Sousa and M. J. C. Malacrida. 2018. The effect of national culture on the relationship between IFRS adoption and the cost of equity capital. Journal of International Accounting Research 17(3): 69-85.

Gordon, L. A. 1976. The return on investment and the cost of capital. Management Accounting (February): 37-40.

Hail, L. and C. Leuz. 2006. International differences in the cost of equity capital: Do legal institutions and securities regulation matter? Journal of Accounting Research (June): 485-531.

Hong, P. K., T. Ma and G. Zhang. 2019. Accruals quality and cost of capital: Evidence from the Chinese stock market. Journal of International Accounting Research 18(1): 71-95.

Hou, K., M. A. van Dijk and Y. Zhang. 2012. The implied cost of capital: A new approach. Journal of Accounting and Economics (June): 504-526.

Hribar, P. and N. T. Jenkins. 2004. The effect of accounting restatements on earnings revisions and the estimated cost of capital. Review of Accounting Studies 9(2-3): 337-356.

Hsieh, T. and J. C. Bedard. 2018. Impact of XBRL on voluntary adopters' financial reporting quality and cost of equity capital. Journal of Emerging Technologies in Accounting 15(2): 45-65.

Hughes, J., J. Liu and J. Liu. 2009. On the relation between returns and implied cost of capital. Review of Accounting Studies 14(2-3): 246-259.

Hughes, J. S., J. Liu and J. Liu. 2007. Information asymmetry, diversification, and cost of capital. The Accounting Review (May): 705-729.

Hwang, L., W. Lee, S. Lim and K. Park. 2013. Does information risk affect the implied cost of equity capital? An analysis of PIN and adjusted PIN. Journal of Accounting and Economics (April-May): 148-167. (Probability of informed trading).

Ilett, F. Jr. 1976. Cost of capital in hospital financing. Management Accounting (February): 46-48.

Imhof, M. J., S. E. Seavey and D. B. Smith. 2017. Comparability and cost of equity capital. Accounting Horizons (June): 125-138.

Indjejikian, R. J. 2007. Discussion of accounting information, disclosure, and the cost of capital. Journal of Accounting Research (May): 421-426.

Jacobs, M. T. and A. Shivdasani. 2012. Do you know your cost of capital? Harvard Business Review (July/August): 118-124.

Jalbert, T. and S. P. Landry. 2003. Which performance measurement is best for your company? Management Accounting Quarterly (Spring): 32-41. (Discussion of EVA, tracking stock and balanced scorecard). (Summary).

Jiao, J., L. A. Myers, J. Ng and S. Lixin. 2023. Customer referencing and capital markets: Evidence from the cost of equity. Contemporary Accounting Research 40(2): 1448-1486.

Johnstone, D. 2016. The effect of information on uncertainty and the cost of capital. Contemporary Accounting Research 33(2): 752-774.

Johnstone, D. 2020. Fama's ratio and the effect of operating leverage on the cost of capital under CAPM. Abacus 56(2): 268-287.

Johnstone, D. 2020. Reply to Linnenluecke, Shen, Smith, Zhu, and Liang (2020). Abacus 56(2): 292-294.

Johnstone, D. and A. Wagenhofer. 2018. Capacity planning under uncertainty and the cost of capital. Journal of Management Accounting Research 30(3): 169-185.

Kasznik, R. 2004. Discussion of “The effect of accounting restatements on earnings revisions and the estimated cost of capital”. Review of Accounting Studies 9(2-3): 357-367.

Kee, R. C. 1999. Using economic value added with ABC to enhance production-related decision making. Journal of Cost Management (December): 3-15. (Summary).

Khedmati, M., E. K. Lim, V. Naiker and F. Navissi. 2019. Business strategy and the cost of equity capital: An evaluation of pure versus hybrid business strategies. Journal of Management Accounting Research 31(2): 111-141.

Kim, J., D. A. Simunic, M. T. Stein and C. H. Yi. 2011. Voluntary audits and the cost of debt capital for privately held firms: Korean evidence. Contemporary Accounting Research 28(2): 585-615.

Konchitchki, Y. 2016. Accounting valuation and cost of capital dynamics: Theoretical and empirical macroeconomic aspects. Discussion of Callen. Abacus 52(1): 26-34.

Konchitchki, Y., Y. Luo, M. L. Ma and F. Wu. 2016. Accounting-based downside risk, cost of capital, and the macroeconomy. Review of Accounting Studies 21(1): 1-36.

Lambert, R., C. Leuz and R. E. Verrecchia. 2007. Accounting information, disclosure, and the cost of capital. Journal of Accounting Research (May): 385-420.

Lambert, R. A. 2009. Discussion of "On the relation between expected returns and implied cost of capital". Review of Accounting Studies 14(2-3): 260-268.

Lambert, R. A. and R. E. Verrecchia. 2015. Information, illiquidity, and cost of capital. Contemporary Accounting Research 32(2): 438-454.

Lamoreaux, P. T., L. M. Mauler and N. J. Newton. 2020. Audit regulation and cost of equity capital: Evidence from the PCAOB's international inspection regime. Contemporary Accounting Research 37(4): 2438-2471.

Lara, J. M. G., B. G. Osma and F. Penalva. 2011. Conditional conservatism and cost of capital. Review of Accounting Studies 16(2): 247-271.

Larocque, S. 2013. Analysts' earnings forecast errors and cost of equity capital estimates. Review of Accounting Studies 18(1): 135-166.

Lee, C. M. C. 2010. Estimating the Cost of Capital Implied by Market Prices and Accounting Data by Peter Easton. The Accounting Review (March): 745-747.

Lewellen, C. M., L. Mauler and L. Watson. 2021. Tax haven incorporation and the cost of capital. Contemporary Accounting Research 38(4): 2982-3016.

Li, K. K. and P. Mohanram. 2014. Evaluating cross-sectional forecasting models for implied cost of capital. Review of Accounting Studies 19(3): 1152-1185.

Li, S. 2010. Does mandatory adoption of international financial reporting standards in the European Union reduce the cost of equity capital? The Accounting Review (March): 607-636.

Li, S. and R. Pinsker. 2005. Modeling RBRT adoption and its effects on cost of capital. International Journal of Accounting Information Systems 6(3): 196-215.

Martin, J. R. Not dated. Relationship between the internal rate of return (IRR), cost of capital, and net present value (NPV). Management And Accounting Web. IRR NPV and Cost of Capital

Maus, W. J. 1980. How to calculate the cost of capital in a privately-owned company. Management Accounting (June): 20-24.

McInnis, J. 2010. Earnings smoothness, average returns, and implied cost of equity capital. The Accounting Review (January): 315-341.

McNulty, J. J., T. D. Yeh, W. S. Schulze and M. H. Lubatkin. 2002. What's your real cost of capital? Harvard Business Review (October): 114-121. (Replacing the capital asset pricing model with the market-derived capital pricing model).

Melnyk, Z. L. 1970. Cost of capital as a function of financial leverage. Decision Sciences 1(3-4): 327-356.

Naiker, V., F. Navissi and C. Truong. 2013. Options trading and the cost of equity capital. The Accounting Review (January): 261-295.

National Association of Accountants. 1984. Statement on management accounting, no. 4A - Cost of capital. Management Accounting (November): 68-74.

National Association of Accountants. 1988. SMA 4H: Uses of the cost of capital. Management Accounting (January): 55-58.

Opare, S., M. N. Houqe and T. van Zijl. 2021. Meta-analysis of the impact of adoption of IFRS on financial reporting comparability, market liquidity, and cost of capital.  Abacus 57(3): 502-556.

Osma, B. G., J. Gomez-Conde and E. de las Heras. 2018. Debt pressure and interactive use of control systems: Effects on cost of debt. Management Accounting Research (September): 27-46.

Pagano, M. S. and D. E. Stout. 2004. Calculating a firm's cost of capital. Management Accounting Quarterly (Spring): 13-20.

Penman, S. and X. Zhang. 2020. A theoretical analysis connecting conservative accounting to the cost of capital. Journal of Accounting and Economics (February): 101236.

Pittman, J. A. and S. Fortin. 2004. Auditor choice and the cost of debt capital for newly public firms. Journal of Accounting and Economics (February): 113-136.

Plumlee, M. A. 2016. Discussion of "The effect of information on uncertainty and the cost of capital". Contemporary Accounting Research 33(2): 775-782.

Pratt, S. P. 1998. Cost of Capital: Estimation and Applications. John Wiley & Sons.

Pratt, S. P. 2002. Cost of Capital Set, Set contains: Cost of Capital Book and Workbook. John Wiley & Sons.

Rahman, A. R. and R. S. Debreceny. 2014. Institutionalized online access to corporate information and cost of equity capital: A cross-country analysis. Journal of Information Systems (Spring): 43-74.

Rakow, K. C. 2010. The effect of management earnings forecast characteristics on cost of equity capital. Advances in Accounting: Incorporating Advances in International Accounting 26(1): 37-46.

Richardson, A. and M. Welker. 2001. Social disclosure, financial disclosure and the cost of equity capital. Accounting, Organizations and Society 26(7-8): 597-616.

Rickey, K. R. 1966. Cost of capital - Determination and use. Management Accounting (February): 14-19.

Strobl, G. 2013. Earnings manipulation and the cost of capital. Journal of Accounting Research (May): 449-473.

Taylor, G., G. Richardson, A. Al-Hadi and I. Obaydin. 2018. The effect of tax haven utilization on the implied cost of equity capital: Evidence from U.S. multinational firms. Journal of International Accounting Research 17(2): 41-70.

Trabelsi, S. 2015. Discussion of How does XBRL affect the cost of equity capital? Evidence from an emerging market. Journal of International Accounting Research 14(2): 147-149.

Truong, C., T. H. Nguyen and T. Huynh. 2021. Customer satisfaction and the cost of capital. Review of Accounting Studies 26(1): 293-342.

Vatter, W. J. 1964. The cost of capital. California Management Review (Summer): 19-30.

Verrecchia, R. E. 1999. Disclosure and the cost of capital: A discussion. Journal of Accounting and Economics (January): 271-283.

Williams, M. 2004. Discussion of “The role of information precision in determining cost of equity capital”. Review of Accounting Studies 9(2-3): 261-264.

Zhang, G. 2013. Accounting standards, cost of capital, resource allocation, and welfare in a large economy. The Accounting Review (July): 1459-1488.

Zhang, L. and M. Wilson. 2018. Accruals quality, stock return seasonality, and the cost of equity capital: International evidence. Contemporary Accounting Research 35(2): 1067-1101.

Zhang, L. and S. Ding. 2006. The effect of increased disclosure on cost of capital: Evidence from China. Review of Quantitative Finance & Accounting 27(4): 383-401.