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dc.contributor.authorChen, Yangyang
dc.contributor.authorTruong, Cameron
dc.contributor.authorVeeraraghavan, Madhu
dc.date.accessioned2018-03-29T02:49:28Z
dc.date.available2018-03-29T02:49:28Z
dc.date.issued2015
dc.identifier.issn0306-686X
dc.identifier.doi10.1111/jbfa.12126
dc.identifier.urihttp://hdl.handle.net/10072/172407
dc.description.abstractIn this paper, we show that the sensitivities of an executive's wealth to changes in stock prices (deltas) decrease the implied cost of equity capital while the sensitivities of an executive's wealth to changes in stock volatility (vegas) increase the implied cost of equity capital. Our findings demonstrate that shareholders understand the risks of firms’ future projects as embedded in executive compensation and price these risks into the cost of equity capital accordingly. The findings have strong implications for optimal executive compensation contract design, project evaluation and cost of capital estimation.
dc.description.peerreviewedYes
dc.languageEnglish
dc.language.isoeng
dc.publisherBlackwell Publishing
dc.relation.ispartofpagefrom915
dc.relation.ispartofpageto946
dc.relation.ispartofissue7-8
dc.relation.ispartofjournalJournal Of Business Finance And Accounting
dc.relation.ispartofvolume42
dc.subject.fieldofresearchAccounting, Auditing and Accountability not elsewhere classified
dc.subject.fieldofresearchAccounting, Auditing and Accountability
dc.subject.fieldofresearchBanking, Finance and Investment
dc.subject.fieldofresearchcode150199
dc.subject.fieldofresearchcode1501
dc.subject.fieldofresearchcode1502
dc.titleCEO Risk-Taking Incentives and the Cost of Equity Capital
dc.typeJournal article
dc.type.descriptionC1 - Articles
dc.type.codeC - Journal Articles
gro.hasfulltextNo Full Text
gro.griffith.authorVeeraraghavan, Madhu


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