The effect of firm size on the relation between disclosure quality and cost of equity interest of listed companies in Tehran stock exchange

Subject Areas : Management Accounting

بیتا  مشایخی ¹ (ندارد)
سوران  فرهادی ² (ندارد)

Received: 2013-02-11 Accepted : 2013-05-10 Published : 2014-03-13

Keywords: Firm Size, Disclosure Quality, cost of equity capital,

Abstract :

Accurate and timely disclosure of information is one of the important tools of corporatemanagers which reduce the cost of capital. However, larger companies gain more benefitthan smaller companies because of improve and raising the level of disclosure. In this study,the moderating effect of firm size on the relationship between disclosure quality and the costof equity capital has been examined. The period of time for this research is between the years1382 to 1389. The population of interest is consisted of all the listed companies in Tehranstock exchange. After applying restrictions corresponding to the sample selection rules, 98companies were selected as a sample by random. In previous studies, where the relationshipbetween disclosure and cost of equity was to be tested, size is included as a control variable. itis shown in general, for large companies there is a significant and negative relationshipbetween disclosure quality and cost of equity capital. On the other side, for companies smallerthan average such as relationship is not visible. According to this study Investors and otherparticipants in market could access to useful information respect to disclosure benefits and it’srelation to cost of capital of interest given to its size. So it stimulate them in market andsomehow change in position of domestic stock market and also it leads to more attention tofirms disclosure , level of disclosure and firm size.

References:

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