Explaining the relationship between accounting conservatism and cost of capital in listed companies in Tehran stock exchange

Abstract

This study provided the theoretical basis for research and study the relationship between accounting conservatism and cost of capital for firms listed on the stock exchange deals. In this study, using a conservative model of Basu (1997) has been measured. Population studied in this research are listed companies in Tehran Stock Exchange. Using a sampling culled 63 companies listed in Tehran Stock Exchange during the period 2002 to 2009 were selected for correlation test was used to test the hypothesis. The results indicate that the capital cost of accounting conservatism and the conservatism of accounting education costs through debt financing, there is a significant relationship, between accounting conservatism, but there is a significant relationship between the rate of return on common shareholders.