The empirical relationship between earnings quality, cost of equity capital, and cost of debt

本研究旨在探讨会计盈馀品质、权益资本成本与负债成本之关系。通过分析，我发现了以下证据。(1)具有较高收益波动性的公司，即收益质量较低的公司，其权益资本成本较高。（2）应计项目质量、盈利持续性、盈利可预测性和盈利平滑性与债券收益率利差呈负相关。(3)盈余质量指标，即应计项目质量、盈余可预测性和盈余平滑性与特质风险负相关。(4)管理层预测盈余质量与特质风险负相关.

The purpose of this research is to investigate the relationshipbetween accounting earnings quality, cost of equity capital, and cost of debt. As a result of analyses, I find the following evidences.(1) Firms with higher earnings volatility, that is low earnings quality, experience higher cost of equity capital.(2)General proxies for earnings quality, that is, accruals quality, earnings persistence, earnings predictability, and earnings smoothness have negatively correlated with bond yield spread.(3) Proxies for earnings quality, that is, accruals quality, earnings predictability, and earnings smoothness have negatively correlated with idiosyncratic risk.(4) Quality of management forecast earnings measured by management forecasterrors have negative correlations with idiosyncratic risk.