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Financial Constraint, Property Right and Cost of Capital
School of Management, Jinan University, Guangzhou, China
- 1 School of Management, Jinan University, Guangzhou, China
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Abstract
This paper examines the impact of financing constraint risk on the cost of equity capital, and finds that there is a significant positive correlation between the financing constraint risk and the cost of equity capital. The greater the financing constraint risk is, the greater the cost of equity capital is, and state-owned enterprises can mitigate the impact of financing constraint on the cost of equity capital. For companies that do not disclose the protection of shareholders’ equity in the annual report, their financing constraint risk has an impact on the cost of equity capital. The influence of cost is more significant.
KeywordsFinancial ConstraintCost of Equity CapitalProperty Right
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