Abstract

http://ssrn.com/abstract=1534316
 
 

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Asset Liquidity, Cost of Capital and IFRS Adoption


George Lee


Simon Fraser University (SFU) - Beedie School of Business

Yasheng Chen


Simon Fraser University (SFU) - Beedie School of Business

January, 10 2010


Abstract:     
We study the economic consequence of IFRS adoption on cost of capital. We develop a model in which asset liquidity and IFRS adoption play a crucial role in determining the cost of capital. Our model and analysis predict that firms that adopt IFRS will have lower cost of capital than those do not. We then empirically test these predictions. The results of our cross-industry regression highly support our predictions.

Number of Pages in PDF File: 22

Keywords: Economic Consequence, IFRS, cost of capital, asset liquidity, cross section

JEL Classification: M44

working papers series


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Date posted: January 11, 2010  

Suggested Citation

Lee, George and Chen, Yasheng, Asset Liquidity, Cost of Capital and IFRS Adoption (January, 10 2010). Available at SSRN: http://ssrn.com/abstract=1534316 or http://dx.doi.org/10.2139/ssrn.1534316

Contact Information

George Lee (Contact Author)
Simon Fraser University (SFU) - Beedie School of Business ( email )
8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada
Yasheng Chen
Simon Fraser University (SFU) - Beedie School of Business ( email )
8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada
604-291-4485 (Phone)
604-291-4920 (Fax)
HOME PAGE: http://www.sfubusiness.ca
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