Accounting
Saeed Pakdelan; Alireza Azarberahman; Sara Akbari; Jalal Azarberahman
Abstract
Risk disclosure refers to providing information to the user to inform of any opportunities or threats .Theoretically, disclosure mainly aims to reduce the information asymmetry as well as investor uncertainty, thereby indirectly lowering the equity cost. An advantage of risk disclosure is its effectiveness ...
Read More
Risk disclosure refers to providing information to the user to inform of any opportunities or threats .Theoretically, disclosure mainly aims to reduce the information asymmetry as well as investor uncertainty, thereby indirectly lowering the equity cost. An advantage of risk disclosure is its effectiveness in reducing the equity cost. Therefore, risk disclosure can help decrease investor uncertainty, thus diminishing the equity cost. This project mainly investigates the relationship between risk reporting and cost of capital in 174 firms listed on the Tehran Stock Exchange for the period 2012-2018. This is an applied research study in terms of purpose and descriptive-correlational in terms of methodology. In this study, the variable of risk disclosure was collected by analyzing the content of financial statements, explanatory notes, and board of director reports. The cost of capital was calculated in three ways: cost of debt, cost of ordinary shares, and weighted average cost of capital (WACC). Thus, the relationship between risk disclosure and cost of capital was examined in the form of three individual hypotheses. The results demonstrated no significant relationship between risk disclosure and cost of debt; therefore, the first hypothesis is rejected. It was also suggested that there is a statistically significant negative relationship between risk disclosure and cost of common equity; thus, the second hypothesis was confirmed. Finally, risk disclosure appeared to have a statistically significant negative relationship with WACC; therefore, the third hypothesis was confirmed.
Saeed Pakdelan; Alireza Azarberahman; Jalal Azarberahman; Ebrahim Timori
Volume 6, Issue 12 , December 2019, , Pages 891-905
Abstract
In the financial literature, risk-taking and investment-related decisions are among the most important decisions for companies that make optimal decisions in these two areas, optimally allocating resources and directing financial resources to economic investments and profitable projects for value creation. ...
Read More
In the financial literature, risk-taking and investment-related decisions are among the most important decisions for companies that make optimal decisions in these two areas, optimally allocating resources and directing financial resources to economic investments and profitable projects for value creation. The purpose of the research is to investigate the relationship between audit quality and risk taking on value creation in firms listed in Tehran Stock Exchange (TSE). The research used five components of auditor's specialist, tenure, audit size, ownership concentration, and board of director’s independence to evaluate audit quality. The statistical population of the study includes the companies listed in TSE. Using a screening method, 610 firm-year data were selected for a 5-year period (2013-2017). This research is based on panel data and multivariate regression method. The research findings show that among these five components as well as the risk factor, only the variables of auditor tenure and ownership concentration have a significant effect on corporate value creation. The originality of the results of the research contributes to the auditing and capital market in TSE.
