Impact of intellectual capital on cost of capital and market value

Today, the role of intellectual capitals is more effective than financial capitals in valuation of science-based industries in business units. Accounting system plays a key role for finding appropriate strategies towards achieving efficient methods for evaluation of intellectual capitals. One of the most salient failures in traditional accounting systems is not to reflect the value of intellectual capitals in the fiscal reports of the business units. This research is conducted to investigate the relationship between intellectual capital and cost of financing and the market value of listed companies in Tehran Stock Exchange for an eight year period from 2005 to 2012 and to evaluate the data of 84 firms. To measure intellectual capital, the value added intellectual capital coefficient, value added intellectual capital, and value added capital applied were used. Applying these criteria is the most commonly used method for intellectual capital measurement. To analyze the collected data, Pearson correlation method, univariate and multivariate regression models, and Z test of Wang were utilized. The results of this work showed that the value added capital applied, value added intellectual capital, and value added intellectual coefficient have an inverse effect on weighted average cost of capital but do not affect market value.