Earnings Management Linked to Higher Cost of Equity in Malaysian Firms
The study looked at how companies in Malaysia manage their earnings to lower their cost of equity. They analyzed data from 150 firms between 2000-2011. The researchers found that there is a weak, inverse relationship between earning management and cost of equity. They used different methods to predict this relationship and found that factors like debt to equity ratio, firm size, and return on equity also play a significant role in determining the cost of equity.