DOI: 10.5176/2010-4804_3.3.318
Authors: Mohammad Adam, Mukhtaruddin and Rizky Amelia Puteri
Abstract:
This research aims to analyzing the effect of earning management and level of voluntary disclosure on cost of equity capital in a financial report. Since earning management and level of voluntary disclosure are the main problems in management policy, a manager will put them into consideration when making a policy. The population is manufacturing companies listed in Indonesia Stock Exchange (ISE) and in LQ-45 Index in the year of 2009-2010. The samples (22 companies) were selcted by purposive sampling method. The secondary data used in this research and obtained from IDX and used of multiple linear regressions to test the hypothesis development. The results showed that independent variable name earning management influenced cost of equity capital significantly negative and was in line with the first hypothesis. The second hypothesis was rejected because level of disclosure was proven having no significant influenced on cost of equity. Control variable showed that stock beta influenced cost of equity significantly positive whereas the company size was proven having no significant influenced.
Keywords: Earning Management, Disclosure Level, Cost of Equity, Beta, and Company Size
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