Information Disclosure,Income Opacity and the Cost of Equity Capital

In this paper,we examine the association between the cost of equity capital and the information disclosure quality by a sample of equity issues during the period of 1993—2001 in China.The rcsuhs of empirical investigation suggest that the higher information dis- closure quality is associated with a lower cost of equity capital after controlling some factors. And we also find that the cost of equity capital is affected significantly by the average infor- mation disclosure quality three years before issuing rather than the information disclosure quality one year before issuing.