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Discussion of 'Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity'

13 Pages Posted: 29 Jul 2012  

Rodrigo S. Verdi

Massachusetts Institute of Technology (MIT)

Date Written: July 10, 2012

Abstract

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.

Keywords: Interim reporting frequency, information asymmetry, cost of equity

JEL Classification: G14, G18, M41, M45

Suggested Citation

Verdi, Rodrigo S., Discussion of 'Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity' (July 10, 2012). Journal of Accounting & Economics (JAE), Forthcoming. Available at SSRN: https://ssrn.com/abstract=2118815

Rodrigo S. Verdi (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

Sloan School of Management
100 Main Street E62-666
Cambridge, MA 02142
United States
(617) 253 2956 (Phone)

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