Research On The Impact Of Stock Price Crash Risk On The Cost Of Equity Capital

The cost of equity capital is the consideration that enterprises pay for issuing stocks to obtain the right to use funds.It reflects the expected rate of return demanded by investors.Companies need to focus on this factor when making investment and financing decisions.In recent years,the cost of equity capital has become a hot topic in the field of corporate finance.However,the cost of equity capital can not be directly obtained,and it needs to be estimated by various measurement models.At present,the measurement models of equity capital cost mainly include risk compensation model based on realized income and implicit equity capital cost based on expected income.Domestic research on the cost of equity capital started relatively late,and the existing literature basically refers to foreign estimation models to study the factors affecting the cost of equity capital.At present,scholars have explored the factors affecting the cost of equity capital from various perspectives,but most of the existing studies focus on corporate governance,information disclosure,corporate financial characteristics,etc.There is a gap in the study of the impact of stock price plunge on the cost of equity capital,especially under the peer effect.The frequent occurrence of “stock price collapse“ has become a“financial anomaly“ that can not be ignored in the stability of capital market,and is not conducive to the healthy development of enterprises.Based on this,this paper chooses Shenzhen A-share non-financial listed companies from 2010 to 2017 as the research sample,uses panel data fixed effect model to empirically test the impact of stock price crash risk on the cost of equity capital.On this basis,the paper further studies the relationship between the quality of corporate information disclosure and the proportion of institutional investors.Finally,we test the difference of the regulatory role of institutional investors under different property rights.The empirical results show that:(1)the risk of stock price collapse of peer firms significantly increases the cost of equity capital;(2)the quality of information disclosure has no significant negativeregulatory effect on the risk of stock price collapse and the risk of stock price collapse of peer firms;(3)the increase of the proportion of institutional investors weakens the positive relationship between the risk of stock price collapse and the cost of equity capital of peer firms;(4)Institutional investors play a more significant role in the sample of state-owned enterprises.Based on theoretical analysis and empirical test,this paper puts forward policy recommendations from the perspective of social supervision,corporate governance and investors.