The Impact of Information Asymmetries on Valuation: What Happens When Others Know More?

Roberto Moro-Visconti ()
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Roberto Moro-Visconti: Catholic University of the Sacred Heart

Chapter Chapter 9 in Augmented Corporate Valuation, 2026, pp 415-453 from Springer

Abstract: Abstract This chapter examines how information asymmetries—gaps in knowledge between insiders and outsiders—systematically distort corporate valuations. It explains how investors compensate for uncertainty by demanding higher risk premiums, resulting in lower valuation multiples and wider credit spreads. Drawing on economic theory and empirical evidence, the chapter outlines the mechanisms through which opacity erodes value, including the quality of disclosure, governance, and credibility of verification. It further explores how distress amplifies asymmetries, how enhanced transparency mitigates them, and how dynamic information resolution improves valuations over time.

Keywords: Valuation discounts; Disclosure quality; Investor confidence; Governance mechanisms; Transparency (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-17903-6_9

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DOI: 10.1007/978-3-032-17903-6_9

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