Discussion of “Financial reporting frequency, information asymmetry, and the cost of equity”
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Fu, Kraft and Zhang (2012) use a hand-collected sample of firms with different interim reporting frequencies from 1951 to 1973 to test whether higher reporting frequency is associated with lower information asymmetry and a lower cost of equity capital. Their results suggest that firms with higher reporting frequency (e.g., firms reporting quarterly as opposed to annually) have lower information asymmetry and a lower cost of equity capital. In this discussion, I expand on FKZ by elaborating on their hypothesis development and research design, and providing suggestions for future research.
DepartmentSloan School of Management
Journal of Accounting and Economics
Verdi, Rodrigo S. “Discussion of ‘Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity.’” Journal of Accounting and Economics 54, no. 2–3 (October 2012): 150–153.
Author's final manuscript