Accounting Transparency Linked To Cost of Capital, Valuation: Study

June 17, 2013

A new study by an accounting professor of University Of California Berkeley’s Haas School Of Business finds greater transparency in firms’ earnings has a positive effect on the bottom line.

“Cost of Capital and Earnings Transparency,” (published in the Journal of Accounting and Economics, April-May 2013) establishes that the transparency of a firm’s accounting earnings is a telling indicator of the company’s cost of capital and thus its valuation, according to the professor, Yaniv Konchitchki.