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dc.contributor.authorHinson, Lisa Austin
dc.description.abstractI investigate whether managerial motivations for issuing management forecasts impact the relation between forecast policies and the cost of equity capital. Extant research on the relation between voluntary disclosure and the cost of equity capital assumes that management discloses information to credibly adjust investor expectations and, thus, lower cost of capital. My study is motivated by the low likelihood that all management forecasts yield the credible information underlying the beneficial effect on cost of equity capital. Drawing from the literature on management forecast incentives, I classify management forecast motivations other than cost of capital reduction into three categories: (1) compliance with exchange rules, (2) opportunism to benefit managerial self-interests, and (3) opportunism to benefit aligned managerial/existing shareholder interests. I find that, of firms that forecast, those with policies containing higher percentages of forecasts motivated by rule compliance, managerial opportunism, and aligned managerial/existing shareholder opportunism have higher cost of equity capital. Thus, evidence suggests that underlying forecast motivations impact the management earnings forecast policy-cost of equity capital relation.
dc.rightsOn Campus Only Until 2018-05-01
dc.subjectManagement forecasts
dc.subjectvoluntary disclosure
dc.subjectcost of capital
dc.titleManagement earnings forecast policies and the cost of equity capital
dc.title.alternativedo motives matter?
dc.description.departmentBusiness Administration
dc.description.advisorStephen Baginski
dc.description.committeeStephen Baginski
dc.description.committeeSanthosh Ramalingegowda
dc.description.committeeJohn Campbell
dc.description.committeeLinda S. Bamber

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