Information Asymmetry and Its Impact on The Weighted Average Cost of Capital - Applied to the Iraqi Stock Market for The Period (2010-2020)

Khaleefah, Widad S.; Al-Hussainy, Duaa N.

doi:10.33899/tanra.2023.177389.1231

	Information Asymmetry and Its Impact on The Weighted Average Cost of Capital - Applied to the Iraqi Stock Market for The Period (2010-2020)
TANMIYAT AL-RAFIDAIN
Article 8, Volume 42, Issue 137, 2023, Pages 138-158 PDF (913 K)
Document Type: Research Paper
DOI: 10.33899/tanra.2023.177389.1231
Authors
Widad S. Khaleefah^* ; Duaa N. Al-Hussainy
Department of Finance and Banking Sciences, College of Administration and Economics, University of Mosul, Mosul, Iraq
Abstract
The study aimed to test and analyze the impact of information asymmetry on the cost of capital, based on a research problem (“What is the nature, size, and direction of the impact of information asymmetry on the cost of capital”?),On this basis, the study assumed "there is a statistically significant effect of information asymmetry in the cost of capital",The study represented a sample that included all companies listed in the Iraqi Stock Exchange, and an autoregressive model was used to measure the effect of independent variables on the dependent variable. The study concluded by proving the negative impact of trading volume in WACC (in the short term, and as the results showed the significant effect of the information asymmetry indicators represented by (profit margin and stock turnover) on the cost of capital in the short term,The study recommended the urgent necessity to apply the principles of corporate governance for companies listed on the Iraqi Stock Exchange, which work to activate accounting standards, improve the level of disclosure and transparency, and improve the integrity of the financial markets.
Keywords
Information Asymmetr; Cost of Capital; Bird in Hand Theory

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