Title:	Accounting Conservatism and the Costof Capital: An International Analysis
Authors:	LI, XI
Keywords:	Cost of equity, cost of debt, conditional conservatism, legal enforcement
Issue Date:	2015
Publisher:	John Wiley & Sons Ltd
Description:	This paper examines the role of conditional accounting conservatism in mitigating the cost of equity and debt capital in an international setting. The findings are that firms domiciled in countries with more conservative financial reporting systems have lower cost of equity and debt capital. The paper further explores the cross-sectional variation of the above relationships, finding that the negative association between conditional conservatism and the cost of equity and debt capital is more pronounced in countries with stronger legal enforcement, suggesting a complementary role between conservatism and legal institutions in capital markets.
URI:	http://196.189.45.87:8080/handle/123456789/105181
Appears in Collections:	Accounting and Finance

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