Disclosure Quality and the Cost of Capital: Evidence from Iran RezaVakilifard Hamida, Yaghoobnezhad Ahmada, Beshkooh Mahdib aDepartment of Accounting, Tehran Science and Research branch, Islamic azad University, Tehran, Iran bPh.D. Student, Accounting, Tehran Science and Research branch, Islamic azad University, Tehran, Iran JEL Classification: G38 Online published on 15 April, 2014. Abstract This paper examines the effects of disclosure quality on the cost of equity capital in Tehran stock exchange (TSE). We used qualitative characteristics of financial reporting as measure of disclosure quality and capital asset pricing model (CAPM) as a measure for cost of capital. Using a sample of 70 listed companies in TSE, we find that there is not significant relation between disclosure quality and cost of capital. In addition we document that there is no significant difference between explanatory power of models base on financial reporting qualitative characteristics and TSE reported ranks. Our finding can be useful for potencial investors and creditors in economic decision making. Top Keywords Disclosure quality, Cost of capital, capital asset pricing model, qualitative characteristics of financial reporting. Top |