Discussion of 'Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity'
Rodrigo S. Verdi
Massachusetts Institute of Technology (MIT)
July 10, 2012
Journal of Accounting & Economics (JAE), Forthcoming
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.
Number of Pages in PDF File: 13
Keywords: Interim reporting frequency, information asymmetry, cost of equity
JEL Classification: G14, G18, M41, M45Accepted Paper Series
Date posted: July 29, 2012
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