• ISSN(P) : 2708-2474
  • ISSN(E) : 2708-2482
  • ISSN(L) : 2708-2474

Article

 

The Effect of Chief Executive Officer Dominance and Shareholder Rights on Cost of Equity Capital in Pakistan

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Abstract

This Research explores the effect of Chief executive Dominance and Shareholder rights on Cost of equity of listed companies in an emerging equity market, Pakistan. The research is for the period of 2012 to 2018 for which firm level data of top 100 non-financial listed firms from Pakistan Stock Exchange has been examined by using descriptive statistics, a correlation -matrix, Pooled OLS and Fixed Effect Model approach. The impact of controlled variables which includes firm size, Financial Leverage, and Book to market ratio influence on the firms cost of equity has also been investigated. Research results indicate that when Chief executive officers align their interest with that of shareholders, the risk of agency problem is mitigated thus leading to lower cost of equity.

Authors

1-Yawar Miraj Khilji
MS Scholar, Institute of Business Studies and Leadership, Abdul Wali Khan University Mardan, KP, Pakistan.

2-Shehzad Khan
Assistant Professor, Institute of Business Studies and Leadership, Abdul Wali Khan University Mardan, KP, Pakistan.

3-Muhammad Faizan Malik
Assistant Professor, Institute of Business Studies and Leadership, Abdul Wali Khan University Mardan, KP, Pakistan.

Keywords

Cost of Equity, Firm Leverage, Shareholder Rights, Chief Executive Dominance, Firm Size, Pakistan Stock Exchange, Corporate Governance

DOI Number

10.31703/gmsr.2020(V-III).09

DOI Link

http://dx.doi.org/10.31703/gmsr.2020(V-III).09

Page Nos

84-93

Volume & Issue

V - III


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Published: Sep 2020

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