This study examines the effect of tax haven utilization on the implied cost of equity capital (ICOE) based on a sample of publicly listed U.S. multinational firms over the 2006–2014 period. Our regression results show that tax haven utilization is significantly positively associated with the ICOE. In terms of economic significance, we find that, on average, a one-standard deviation increase in tax haven utilization leads to an increase in the ICOE for our sample firms by approximately 0.30 percent or 30 basis points. We also observe that our regression results are robust to a number of endogeneity checks. In additional analysis, we find that high agency costs are likely to magnify the positive association between tax haven utilization and the ICOE, while high independent director monitoring could moderate this association. Overall, this study provides unique insights into the effect of tax haven utilization on the ICOE.