The paper empirically tests the relationship between earnings volatility and cost of debt with a sample of more than 77,000 Swedish limited companies over the period 2006 to 2013 observing more than 677,000 firm years. As called upon by many researchers recently that there is very limited evidence of the association between earnings volatility and cost of debt this paper contributes greatly to the existing literature of earnings quality and debt contracts, especially on the consequence of earnings quality in the debt market. Earnings volatility is a proxy used for earnings quality while cost of debt is a component of debt contract. After controlling for firms’ profitability, liquidity, solvency, cashflow volatility, accruals volatility, sales volatility, business risk, financial risk and size this paper studies the effect of earnings volatility measured by standard deviation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) on Cost of Debt. Overall finding suggests that lenders in Sweden does take earnings volatility into consideration while determining cost of debt for borrowers. But a deeper analysis of various industries suggest earnings volatility is not consistently used by lenders across all the industries. Lenders in Sweden are rather more sensitive to borrowers’ financial risk across all the industries. It may also be stated that larger borrowers tend to secure loans at a lower interest rate, the results are consistent with majority of the industries. Swedish debt market appears to be well prepared for financial crises as the debt crisis seems to have no or little adverse effect borrowers’ cost of capital. This study is the only empirical evidence to study the association between earnings volatility and cost of debt. Prior indirect research suggests earnings volatility has a negative effect on cost debt (i.e. an increase in earnings volatility will increase firm’s cost of debt). Our direct evidence from the Swedish debt market is consistent for some industries including media, real estate activities, transportation & warehousing, and other consumer services.

Submitted by Nadir Basilio (nadirsb@uninove.br) on 2016-05-17T16:00:45Z No. of bitstreams: 1 Erivaldo da Silva Carneiro Junior.pdf: 2187858 bytes, checksum: 2375d7752e23682b42e4612c32d63b21 (MD5) / Made available in DSpace on 2016-05-17T16:00:45Z (GMT). No. of bitstreams: 1 Erivaldo da Silva Carneiro Junior.pdf: 2187858 bytes, checksum: 2375d7752e23682b42e4612c32d63b21 (MD5) Previous issue date: 2015-01-27 / This study aimed to investigate the relationship between the level of voluntary disclosure and the cost of debt of soccer clubs in Brazil. As theoretical basis, we used the Theory of Disclosure studied by Verrechia (2001), in the case of the present study Efficiency-based research, as well as being shown the calculations of capital costs, such as presentation of national and international research the subject. Regarding the methodology, the sample was formed by convenience, totaling 20 clubs studied during 2008-2012, to the level of disclosure and the control variables, and from 2009 to 2013, for the cost of debt. The analysis of disclosure and the calculations of the cost of debt, liquidity, obtaining gross revenue and auditing information were obtained from the DFP (Financial Statements) and when possible extrapolated to other statements published by the clubs. Was made an adaptation to the metric of voluntary disclosure of Murcia (2009), which originally had 93 items and in the end, for adaptation to the reality of sport were 73, divided into three groups: economic (33), social (14) and environmental (34). Analysis was made of the disclosure by the club, which gave the overall ranking and group. Calculating the cost of capital was carried out by club and then was made a general ranking of clubs with this variable. The statistical tool used was the panel data analysis, which according tests indicated the regression in fixed effects in cross-section, with an explanatory power of the variables of 16.62%. The research hypothesis can not be proven because of the statistical insignificance of the variables, while indicating that there is an inverse relationship to the cost of capital. As study limitation, the lack of standardization was checked in DFP by the clubs, often making it difficult to obtain the data for analysis and panel data technique is indicated for longer time series and is indicated to be made new studies with larger series. / Este trabalho teve como objetivo investigar a relação entre o nível de disclosure voluntário e o custo de capital de terceiros dos clubes de futebol no Brasil. Como fundamentação teórica, foi utilizada a Teoria da Divulgação estudada por Verrechia (2001), tratando-se o presente estudo de uma pesquisa baseada em Eficiência, além de serem demonstrados os cálculos dos custos de capital, como a apresentação de pesquisas nacionais e internacionais sobre o assunto. Com relação à metodologia, a amostra foi formada por conveniência, totalizando 20 clubes estudados no decorrer de 2008 a 2012, para o nível de disclosure e as variáveis de controle, e de 2009 a 2013, para o custo de capital de terceiros. A análise do disclosure bem como os cálculos do custo de capital de terceiros, liquidez, obtenção da receita bruta e informações sobre auditoria foram obtidas a partir das DFPs (Demonstrações Financeiras Padronizadas) e quando possível extrapolada para outras demonstrações publicadas pelos clubes. Foi feita uma adaptação à métrica de disclosure voluntário de Murcia (2009), que originalmente possuía 93 itens e no final, para adequação à realidade do esporte ficaram 73, divididos em três grupos: econômico (33), social (14) e ambiental (34). Foi realizada análise do disclosure por clube, que originou o ranking geral e por grupo. O cálculo do custo de capital foi realizada por clube e em seguida foi feito um ranking geral dos clubes com esta variável. A ferramenta estatística utilizada foi a análise de dados em painel, que de acordo testes realizados, indicou a regressão nos efeitos fixos na cross-section, com um poder de explicação das variáveis de 16,62%. A hipótese de pesquisa não pode ser comprovada por conta da insignificância estatística das variáveis, embora indicando que existe uma relação inversa com o custo de capital. Como limitação do estudo, foi verificada a falta de padronização nas DFPs por parte dos clubes, dificultando muitas vezes a obtenção dos dados para análise e a técnica de dados em painel é indicada para séries de tempo mais longas, sendo indicado que sejam feitos novos estudos com séries maiores.