Cost of Equity: Disclosure, Size, and Political Connection

摘要

Every businesses are looking for high return. The cost of equity is important to determine the return on investment. This research aims to examine the relationship between disclosure and political connection towards cost of equity. Cost of equity in this research is using Capital Asset Pricing Model (CAPM) approach. The sample used is from manufacture companies listed on Indonesia Stock Exchange from 2014-2017. The regression analysis results indicate that disclosure has negative relationship toward cost of equity. Likewise, the political connection has negative relationship toward cost of equity. Moreover, the size also has negative relationship toward the cost of equity in the companies.