Descriptive statistics for ownership structure

1241 forecasts it comprises of companies of interest to analysts which are not just large companies but also newly listed and not as large.

4.3 Bivariate collenearity of all variables in each sample

Table 4.6 and Table 4.7 show the Pearson correlation coefficients and the associated significant levels of all variables in the ABRES and the ABSDATCAABSDATA samples respectively. Table 4.6 Correlations - ABRES SAMPLE COE SSVR CFVR ABRES LGMV LBTMV BETA COE 1.000 SSVR -0.225 1.000 0.007 CFVR 0.068 -0.214 1.000 0.424 0.011 ABRES 0.199 -0.140 -0.087 1.000 0.018 0.098 0.305 LGMV -0.330 -0.070 0.143 -0.203 1.000 0.000 0.406 0.090 0.016 LBTMV 0.289 0.106 0.125 -0.188 -0.269 1.000 0.001 0.213 0.140 0.025 0.001 BETA 0.053 -0.036 -0.068 -0.011 -0.113 0.130 1.000 0.535 0.675 0.421 0.897 0.182 0.123 Table 4.7 Correlations- ABSDATCA and ABSDATA Sample COE SSVR CFVR ABSDATCA ABSDATA LGMV LBTMV BETA COE 1.000 SSVR -0.197 1.000 0.015 CFVR 0.026 -0.205 1.000 0.752 0.012 ABSDATCA 0.185 -0.127 -0.119 1.000 0.023 0.119 0.145 ABSDATA 0.181 -0.094 -0.032 0.732 1.000 0.026 0.249 0.695 0.000 LGMV -0.336 -0.083 0.197 -0.284 -0.287 1.000 0.000 0.312 0.015 0.000 0.000 LBTMV 0.318 0.129 0.083 -0.150 -0.129 -0.282 1.000 0.000 0.115 0.311 0.066 0.115 0.000 BETA 0.026 -0.060 0.007 -0.007 0.089 -0.034 0.136 1.000 0.751 0.466 0.933 0.930 0.278 0.674 0.096 1242

4.4 Multivariate analysis

To determine if the earnings quality and the ownership structure variables each has a distinct effect on cost of equity, the cost of equity is regressed individually on the respective variables as follows. COE = φ + φ 1 SIZE + φ 2 β + φ 3 BTMV + δ COE = φ + φ 1 Earnings quality+ δ COE = φ + φ 1 CFVR + δ COE = φ + φ 2 SSVR + δ The results are given in Table 4.8 ABRES sample and Table 4.11 ABSDATCAABSDATA sample. The coefficients of size, book to market, each of the earnings quality measures are of the expected sign and significant at the least 5 level. The coefficient of substantial shareholders‘ voting rights is negative in both samples and significant. However the coefficient of cash flowvoting rights and beta are not significant in both samples. COE is then regressed on the established risk factors size, beta and book to market ratio and each of earnings quality and ownership structure variables as follows. COE = φ + φ 1 Earnings quality + φ 2 SIZE + φ 3 β + φ 4 BTMV + δ COE = φ + φ 1 CFVR + φ 2 SIZE + φ 3 β + φ 4 BTMV + δ COE = φ + φ 1 SSVR + φ 2 SIZE + φ 3 β + φ 4 BTMV + δ The results are given in Table 4.9 ABRES sample and Table 4.12 ABSDATCAABSDATA sample. The significance and sign of each of the earnings quality and ownership structure variables do not change when these variables are