Journal
JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS
Volume 52, Issue 2, Pages 811-836Publisher
CAMBRIDGE UNIV PRESS
DOI: 10.1017/S0022109017000187
Keywords
-
Categories
Funding
- Social Sciences and Humanities Research Council of Canada
- Program for Innovative Research Team of Shanghai University of Finance and Economics
Ask authors/readers for more resources
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.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available