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"Oil price shocks and cost of capital: Does market liquidity play a rol" by Tina Prodromou and Riza Demirer

This paper provides novel perspective to the oil-stock market nexus by examining the role of stock market liquidity in the propagation of oil price shocks to the cost of capital (CoC) estimates from a set of 34 global economies. Utilizing implied cost of capital estimates that are extracted from a dividend discount model and disaggregated oil price shock series including oil supply, consumption demand, inventory demand and economic activity shocks, we show that oil price shocks have quite heterogeneous effects on equity financing costs across the world economies, depending on the nature of the shock and the time horizon. Our findings show that oil supply shocks have a consistent positive effect on CoC, particularly for emerging economies and net oil importers, suggesting that supply driven oil price uncertainty significantly raises firm level financing costs regardless of the level of market liquidity. Interestingly however, market liquidity takes on a significant role when interacted ....

Cost Of Capital , Crude Oil , Oil Price Shocks , Stock Market ,

Kiểm toán đưa ý kiến ngoại trừ đối với khoản đầu tư vốn góp vào đơn vị khác của ITA

Kiểm toán đưa ý kiến ngoại trừ đối với khoản đầu tư vốn góp vào đơn vị khác của ITA
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