Influence of information asymmetry on the cost of equity capital in companies admitted to Tehran Stock Exchange

Abstract The purpose of this research is to investigate the effect of information asymmetry on capital structure and capital cost of companies accepted in Tehran Stock Exchange. For this purpose, four different criteria of cost of capital, including the cost of capital (WACC) stock, the cost of capital accumulated profits, the cost of debt and the average cost of capital, were analyzed. The statistical population of this study consisted of 94 companies from 20 different industrial groups that showed a significant relationship between information asymmetry and two criteria for the cost of capital stock and debt expenses in the period of 2004–2014 using combined data. But between information asymmetry and the other two criteria, the accumulated profit cost and the rationale for the cost of capital are not significant. Therefore, it can be said that the operational definition of cost of capital affects the existence or non-existence of the mentioned relationship.