Abstract
The objective of this research is to examine the degree of correlation between the cost of capital from a side and shares market prices and their book values at Kuwait Stock Exchange from the other side. The notion here is that correlation of some sort is transpiring which could affect published financial information and decision making at large. The basic equity valuation model used in the study is the one developed originally by Ohlson (1995), which relates the firm’s equity market value to its book value adjusted for abnormal earnings. A sample of Kuwaiti firms listed on Kuwait stock exchange is used for testing this presumption for the period between 2005 and 2011. The results showed a negative correlation between the cost of capital versus companies' book value on one side, and the cost of capital versus companies' market value on the other side.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
