Investigating the Impact of Intellectual Capital Disclosure on Cost of Equity Capital.

Abstract

This study examined the relationship between intellectual capital disclosure (IC) and cost of equity capital for listed consumer goods companies in the Nigerian Exchange Group. Data was collected from published financial reports of selected firms over a period of 10 years (2011-2020). Descriptive and inferential statistical tools were used in the analysis. The findings revealed that there is a significant negative relationship between intellectual capital reporting and cost of equity capital. Specifically, the reporting of physical, human, structural, and relational capital had an impact on the cost of equity capital. The study also found that information asymmetry had a positive but insignificant influence on the cost of equity capital. The results have important implications for policy makers and organizations. It highlights the benefits of improved IC reporting and provides evidence that it can lead to a reduction in the cost of capital.