... and a path model that links the factors. We discuss SEM’s components, estimation, advantages, best practices, and limitations. We illustrate SEM with an application to disclosure research. Unlike some prior research, we find voluntary disclosure quality is negatively associated with cost of capital, both...

... be estimated at the firm level from a few basic accounting variables and delivers estimates both of firm value and of the firm's cost of capital. Firm value estimates show a log-correlation with observed stock market values of more than 90 percent. JEL Classifications: D21; G12; G17; G31; G32. Editor's...

... (BM). While mathematical in nature, this result is also intuitive and consistent with traditional investment theory. To the extent that firms invest in NPV-positive projects, the expected returns from these projects should be at or above their cost of capital and, all else equal, firms with higher...

... change the focus to accounting for changes in enterprise values; enterprise valuation; estimation of the cost of capital for the enterprise; and prediction of enterprise earnings. Two key/fundamental roles of accounting are in valuation and in prediction...

... to a greater extent in bad states, the firm's covariance with the market portfolio will be lower in bad states. JEL Classifications: G11; G12; G14; G31. asymmetric reporting reporting precision the CAPM Beta systematic risk cost of capital One of the most studied properties of financial...