Effect of Accounting Conservatism on Cost of Capital of Listed Companies in Thailand

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Surachai Am-ugsorn
Kusuma Dampitakse
Sungworn Ngudgratoke


This study was conducted in order to examine the effect of accounting conservatism on cost of capital, which consisted of cost of equity, cost of debt, and weighted average cost of capital, for listed companies in Thailand from 2018 to 2019. The samples were 906 firm- year observations. The data was analyzed by multiple linear regression at a significance level of .05. The results revealed that accounting conservatism negatively impacted the three types of cost of capital. The findings of this study benefit investors and lenders in terms of their investment decision. In case their risks are lower, the cost of capital is also reduced. This reflects investor confidence in the Stock Exchange of Thailand, and suitability of accounting practices determined by the Federation of Accounting Professions.

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