Relationship between Disclosure Level and Cost of Equity in Companies Listed in Tehran Stock Market

The present study aims at investigating the relationship between disclosure level and cost of equity in select companies listed in Tehran Stock Exchange (TSE). The study adopts a descriptive-correlational method. The population of the study consisted of all manufacturing companies listed in TSE (N=201). The research sample was selected based on prerequisite inclusion criteria using random sampling technique. In this regard, a number of 67 companies were selected as the sample from among the population. Pearson correlation coefficient and linear regression analysis were run to analyze the data. Disclosure level was measured based on the two variables of information reliability and timeliness. The results showed a significant negative correlation of the reliability and timeliness of information with the cost of equity. In other words, with increased disclosure level, cost of equity decreased. Besides, either variable was shown to be significant predictors of the cost of equity. Finally, we provide viable and research recommendations to guide further studies.