Annual Report Readability, Tone Ambiguity, and the Cost of Borrowing
| Autor: | Chi Wan, Jin Lei, Jiaping Qiu, Mine Ertugrul |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
050208 finance Actuarial science media_common.quotation_subject 05 social sciences 050201 accounting Annual report Ambiguity Tone (literature) Readability Shareholder Loan Accounting 0502 economics and business Hoarding (economics) External financing Business Finance media_common |
| Zdroj: | Journal of Financial and Quantitative Analysis. 52:811-836 |
| ISSN: | 1756-6916 0022-1090 |
| DOI: | 10.1017/s0022109017000187 |
| Popis: | This paper investigates the impact of a firm’s annual report readability and ambiguous tone on its borrowing costs. We find that firms with larger 10-K file sizes and a higher proportion of uncertain and weak modal words in 10-Ks have stricter loan contract terms and greater future stock price crash risk. Our results suggest that the readability and tone ambiguity of a firm’s financial disclosures are related to managerial information hoarding. Shareholders of firms with less readable and more ambiguous annual reports not only suffer from less transparent information disclosure but also bear the increased cost of external financing. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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