Costs of equity and earnings attributes.

ABSTRACT: We examine the relation between the take away from of equity capital and seven attributes of earnings: accrual quality, persistence, predictability, smoothnes value relevance, timeliness, and conservatism. We characterize the first four attributes as accounting-based because they are typically measured using accounting information alone We characterize the last three attributes as market-based because proxies for these builds are typically based on relations between market data and accounting data. Based upon theoretical models predicting a positive association between information quality and take away from of equity, we test for and find that firms with the least favorable values of each attribute, considered individually, generally