The Equity Capital Cost of Thai listed Companies Across Industries
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Abstract
This paper aims to determine whether the level of equity capital cost varies across industries, and examine the financial ratios affecting the equity capital cost. The sample consists of listed companies in the Stock Exchange of Thailand during the years 2005-2011 and the data is collected from financial reports. The results show that overall cost of equity capital is rather identical among six industries. However, the averaged equity capital cost of Agro and Food Industry, and Industrials are highest compared to other industries. Furthermore, the companies with higher ratios of financial leverage and book-to-market encounter huge capital costs. While larger sized companies have competitive advantage to persuade new investment projects due to lower cost of equity capital.
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