Disclosure level and cost of equity capital in Brazil / Nível de disclosure e custo de capital próprio no mercado brasileiro




This thesis investigates the association between disclosure and cost of equity capital in Brazil. Results are based on a sample of the fifty most liquid shares traded at BOVESPA using data from 1998, 2000, 2002, 2004 and 2005. To proxy for disclosure level a Brazilian Disclosure Index (IDB) was built and used. IDB measures essential features of disclosure across six components: (i) general information about the company, (ii) relationships with employees and management, (iii) non-financial data about market, sales and products, (iv) projections, (v) analysis and discussion of financial data, (vi) other information. To measure cost of equity capital the Ohlson- Juettner-Nauroth model was used. Results show that the general disclosure level improved along the sample period and that the projectionscomponent of IDB presented the poorest scores over the years. There is a negative and statistically significant relation between disclosure and cost of equity capital for all firms in the sample. This association is exacerbated for firms with receive less attention from the analysts and have a more dispersed ownership structure. This thesis extends the Brazilian and international literatures by showing the actual economic benefits of superior disclosure levels.


contabilidade financeira governança corporativa disclosure cost of capital corporate governance

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