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Research on the Impact of Stock Price Crash Risk on the Cost of Equity Capital

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DOI: 10.25236/icssae.2019.110


Junxia Zhang, Qingsong He

Corresponding Author

Junxia Zhang


The global financial crisis in 2008 and the sharp fluctuation of China's stock market in 2015 made the risk of stock price collapse widely concerned by regulators and investors, and also became a hot topic of academic discussion. In recent years, based on the capital market, the academia has studied the formation mechanism of stock price crash risk from the perspectives of behavioral finance and incomplete information. But existing studies have focused on the causes of stock price crash risk, while ignoring the direct examination of its economic consequences. In this context, this paper will study the impact of stock price crash risk on the cost of equity capital.


Risk of stock price crash; Cost of equity capital; Nature of equity; Market conditions