Faculty of Business Administration
Visiting Scholar Seminar


Disclosure and Cost of Equity Capital Revisited

Prof. Jun Liu
University of California, San Diego


Date: 22 November 2021, Monday
Time: 11:00am – 12:00pm


Passcode: 343090


We reexamine the relation between disclosure indices and cost of equity capital employing an empirical specification similar to that of Botosan (1997) for a substantially larger sample over an extended time frame made possible by textual analysis. Our results provide no support for a hypothesis of a negative relation between disclosure indices and implied cost of equity capital.  Rather, consistent with a bias of implied cost of equity capital as a proxy for expected return depicted by Hughes, Liu, and Liu (2009), we find strong evidence of a positive relation.


Prof. Jun Liu is a full professor of finance and accounting from University of California, San Diego. Prof. Liu received his Ph.D. in finance from Stanford University in 2000. Prior to coming to Rady School, he served as an assistant professor at UCLA’s Anderson School of Management from 1999 to 2005. He is formerly also the professor at CKGSB and SAIF. Prof. Liu’s research focuses on theoretical and empirical asset pricing, and the development and use of econometric methods. He published many papers in top journals of finance, accounting, and economics, including, JF, JFE, RFS, TAR, RAS, MS, and JET.