New ECCE study on governance and cost of capital effects

(02 Dec '06)

A new study by ECCE, using data provided by Governance Metrics International, finds that firms with better corporate governance practices enjoy a lower cost of equity capital. According to the study, stock of firms with better governance ratings exhibit lower risk - in terms of both systematic risk and firm-specific volatility. The study adds to a growing body of reserach that seeks to explain the risk implications associated with good/bad governance practices. Our publications section provides the full report entitled "Corporate Governance and the Cost of Equity Capital: Evidence from GMI’s Governance Rating".