실제이익조정이 자본비용에 미치는 영향

This study investigates whether and how a firm's cost of capital is influenced by the extent of a firms's real earnings management via real transaction structuring activities. First, first objective of this study is to test whether a firm's cost of capital increases with the intensity of real earnings management, all else being accounted for. Using yearly cross-sectional regressions of the cost of capital on our proxies for real earnings management, size, beta, market-to-book ratio and other innate risk factor over the 2000-2008, we find that the cost of capital is positively associated with both real earnings management after controlling for all other factors. Especially, abnormal cash flow operation proxed by real earnings management increase the cost of equity higher than abnormal production cost and abnormal discretionary cost proxed by real earnings management. This result implies that the abnormal real activities distort not only the fundamentals of the business but also the quality of reported earnings, and thus increase information asymmetries between managers and outside investors and creditor with respect to a firm's true earnings performance. This increases information risk, and creates an adverse selection problem, on the part of outside investors. Rational investors therefore demand a premium for bearing this real earnings management-related information risk, which in turn leads us to observe a positive relation between the intensity of REM and the cost of equity.