2409-1634Research result. Economic Research2409-163410.18413/2409-1634-2019-5-2-0-21731WOLD ECONOMYREADABILITY OF FIRMS DISCLOSURE AND COST OF EQUITY CAPITAL: AN EMPIRICAL STUDY OF CHINESE LISTED COMPANIESREADABILITY OF FIRMS DISCLOSURE AND COST OF EQUITY CAPITAL: AN EMPIRICAL STUDY OF CHINESE LISTED COMPANIESFahdAlduaisFahdAlduaisaccofahd@hotmail.com20195200

We investigated the association between the readability of annual report and the cost of equity capital (COE). This study focuses on the relationship between the readability of annual reports and the cost of equity capital. The expectation of the hypothesis is that there is a negative association between the readability of an annual report and the COE. This negative association implies that a better readability (lower FOG index) leads to a lower COE. This thesis provides evidence that a higher FOG index leads to increase in COE, which means less readable and understandable annual reports. This is consistent with our expectations. The coefficient is very high, however, and this relationship is significant.

We investigated the association between the readability of annual report and the cost of equity capital (COE). This study focuses on the relationship between the readability of annual reports and the cost of equity capital. The expectation of the hypothesis is that there is a negative association between the readability of an annual report and the COE. This negative association implies that a better readability (lower FOG index) leads to a lower COE. This thesis provides evidence that a higher FOG index leads to increase in COE, which means less readable and understandable annual reports. This is consistent with our expectations. The coefficient is very high, however, and this relationship is significant.

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