Income Smoothing and the Cost of Debt and Credit Ratings

Abdolkarim Moghadam, Mehdi Baharmoghadam and Mojtaba Mohammadzadeh
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Abdolkarim Moghadam: Payame Noor University
Mehdi Baharmoghadam: Shahid Bahonar University
Mojtaba Mohammadzadeh: Islamic Azad University

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2013, vol. 3, issue 3, 234-241

Abstract: The goal of this research is to examine the effect of income smoothing on the cost of debt and the credit rating. The statistic community is the accepted firms in Tehran’s stock exchange during 1385- 1389, that the statistic sample has chosen from them. Also in this research we used Jones’ modified model for measuring the discretionary accruals (measure of income smoothing). And we used regression analysis for testing the research hypothesis. The results of this research show that there is significant and negative relation between income smoothing and cost of debt. And also there is significant and direct relation between income smoothing and firm’s credit rating.

Keywords: Saudi Banking Efficiency; Saudi Financial System; data Envelopment Analysis; Technical Efficiency; Scale Efficiency (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:3:y:2013:i:3:p:234-241

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