How ESG Ratings Can Affect a Firm’s Cost of Equity
Reynolds Holding
AUGUST 2, 2023
energy intensity classification) We first measure COE using an implied COE estimate that relies on residual income and dividend-discounting valuation models. Our findings challenge the widely held belief that higher ESG ratings always lead to a reduction in the cost of equity financing. The Journal of Finance 74 (6), 2789–2837.
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