ESSAYS On Life Cycle, Voluntary Disclosure And The Cost Of Capital Of Brazilian Companies
Name: PAULO VICTOR GOMES NOVAES
Publication date: 04/11/2015
Advisor:
Name |
Role |
|---|---|
| JOSE ELIAS FERES DE ALMEIDA | Advisor * |
Examining board:
| Name |
Role |
|---|---|
| EDUARDO JOSÉ ZANOTELI | Internal Examiner * |
| JOSE ELIAS FERES DE ALMEIDA | Advisor * |
Summary: This thesis investigates how life cycle stages impact on voluntary disclosure, cost of equity
capital and also on the relationship between them. Using a sample of non-financial Brazilian
listed firms covered by analysts between 2008 and 2014, and following the model by
Gebhardt et al. (2001) to develop the Implied Cost of Capital (ICC) using I/B/E/S database,
from Thomson Reuters®, I find that companies on average are benefitted by the reduction of
the cost of capital via improvement in voluntary information level. Using Dickinsons (2001)
life cycle measure, I find that voluntary disclosure level grows until reaching the maturity
phase and then it declines. Moreover, the ICC significantly differs across life cycle stages.
However, I do not find differences among growth, maturity and shake-out, although the level
of the ICC fades out after leaving the initial stage and it increases again in decline stage.
Finally, I find that the improvement of voluntary disclosure level in growth and maturity
stages is better compensated with more reduction in cost of capital. The results for voluntary
disclosure are shown to be robust using a series of sensitivity tests, however the expectation
about cost of capital did not hold using different proxies.
