Which of the following statements is correct,regarding the voluntary disclosure of information provided by a firm?

Question

Quizplus · Accepted Answer

Firms with more informative disclosure policies tend to have more analysts following them and more accurate analyst earnings forecasts, as analysts have more information to base their forecasts on. This can also lead to higher stock valuations and lower costs of capital. Option B is incorrect as lower analyst coverage and less accurate forecasts are associated with less disclosure. Option C is incorrect as increased disclosure is generally associated with lower costs of equity capital. Option D is also incorrect as there is a relationship between increased disclosure and lower costs of equity capital.

Which of the Following Statements Is Correct,regarding the Voluntary Disclosure