How ESG Ratings Can Affect a Firm’s Cost of Equity
Reynolds Holding
AUGUST 2, 2023
trillion in 2016. Investors in firms that emphasize ESG qualities appear to greatly reduce risk and earn returns that exceed those of conventional investments (Derwall et al., energy intensity classification) We first measure COE using an implied COE estimate that relies on residual income and dividend-discounting valuation models.
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