Assessing the relationship between balance sheet conservatism and profit and loss conservatism with cost of equity capital

Advances in Mathematical Finance and Applications

مقاله 4، دوره 7، شماره 4، دی 2022، صفحه 885-899   

نوع مقاله: Research Paper

شناسه دیجیتال (DOI): 10.22034/amfa.2022.1895237.1387

نویسندگان

mohammad farjamfar¹؛ Reza Sheikhrabori^{* 2}؛ morteza farhadi sartangi³

¹Department of accounting, University of Applied Sciences, Iran Industrial Research Unit, P.O. Box 15875-4413, Tehran, Iran

²Department of Industrial Engineering and Management Systems, Amirkabir University of Technology, P.O. Box 15875-4413, Tehran, Iran

³Department of Industrial Engineering, Pyame Noor University(PNU), P.O.Box,19395-3697,Tehran, Iran

چکیده

Markets such as Money Market, Labor market, Commodity market along with Capital market are committed to optimal allocation of capital and financial resources. One of the most important sources of information is financial reports. Investors base their decisions on the balance between risk and return and are interested in estimating their expected future returns and investments using information reported by the company and other evidence. The purpose of this study is to investigate the relationship between accounting conservatism and cost of equity capital and evaluate the economic results of accounting conservatism through information perspective. Therefore, in order to achieve the main objective of the research, first the reports and documentation of past performance of the sample member companies have been studied and the required data have been collected. The research hypotheses were then evaluated which consisted of one main hypothesis and two sub-hypotheses, indicating that there is a negative and relatively strong relationship between conserv-atism and capital cost. Differentiating between several aspects of accounting con-servatism and examining the relationship among each aspect and cost of equity capital are new innovation of the present study.
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کلیدواژه‌ها

Capital Market؛ Conservatism؛ Capital Expenditure؛ Risk and Return؛ Accounting conservatism

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