Management entrenchment and the cost of equity capital

Denton Collins and Henry Huang

Journal of Business Research, 2011, vol. 64, issue 4, 356-362

Abstract: This paper investigates the effect of management entrenchment on the cost of equity capital. Using the Bebchuk et al. (2009) entrenchment index data from 1989 through 2002, and using mainly the Ohlson and Juettner-Nauroth (2005) method to estimate the cost of capital, we find that increases (decreases) in management entrenchment are associated with increases (decreases) in costs of equity capital.

Keywords: Cost; of; capital; Management; entrenchment; Governance; risk (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:64:y:2011:i:4:p:356-362

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