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Disclosure Strategies and Cost of Capital


Facultad de Ciencias Económicas y Empresariales, University of Seville, Avenida Ramón y Cajal, 1. 41018 Seville Spain. E-mail:


Theoretically, companies disclosing more voluntary information will benefit from a lower cost of capital, although empirical research provides inconclusive results. Our study aims to analyze the influence of the disclosure of forward-looking information on the cost of capital, because this information is extremely useful for investors. Results show that only specific information on actions, programs, decisions, and/or quantitative financial information helps toward the reduction of cost of capital. This evidence has direct economic implications, because it enables regulators and managers to focus on those disclosure strategies that are effective in the reduction of cost of capital. Copyright © 2012 John Wiley & Sons, Ltd.