Financial Constraint, Property Right and Cost of Capital ()
ABSTRACT
This paper examines the impact of financing
constraint risk on the cost of equity capital, and finds that there is a
significant positive correlation between the financing constraint risk and the cost
of equity capital. The greater the financing constraint risk is, the greater
the cost of equity capital is, and state-owned enterprises can mitigate the
impact of financing constraint on the cost of equity capital. For companies
that do not disclose the protection of shareholders’ equity in the annual
report, their financing constraint risk has an impact on the cost of equity
capital. The influence of cost is more significant.
Share and Cite:
Wan, Z. (2020) Financial Constraint, Property Right and Cost of Capital.
Modern Economy,
11, 443-452. doi:
10.4236/me.2020.112033.