Information and the cost of capital : the Easley-O’Hara (2004) model with endogenous information acquisition/ created by Greg Clinch and Brett Lombardi
Material type:
- text
- unmediated
- volume
- 03128962
- HD31 AUS
Item type | Current library | Call number | Vol info | Status | Notes | Date due | Barcode | |
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Main Library - Special Collections | HD31 AUS (Browse shelf(Opens below)) | Vol. 36, no.1 (pages 05-14) | Not for loan | For in house use only |
We investigate the impact of endogenous information acquisition on Easley and O’Hara’s (2004) result that moving information from being publicly to privately available results in an increase in a firm’s cost of capital. As in Christensen et al. (2010), when the cost of information acquisition is fixed, Easley and O’Hara’s result reverses. We study two scenarios, however, where Easley and O’Hara’s result can continue to hold (i): where the cost of information acquisition is increasing in its precision, and (ii) where the benefits of acquiring private information span multiple firms.
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