This study seeks to analyze the relationship between the disclosure of forward-looking information, cost of capital and the extent to which this relationship reflects the efficiency of investment decisions.
The study depends on a sample of 70 companies of those registered in the Egyptian Stock Exchange during the fiscal years 2017, 2018, and 2019 using the method of content analysis, and analyzing the elements that lead to discrepancies between companies, in addition to showing its impact on the cost of capital and investment decisions.
The findings of the study reveal that there is a negative relationship between the level of disclosure of forward-looking information and the cost of capital, and there is a positive impact of the level of FLID on the efficiency of investment decisions.
Based on the results, the study recommends motivating the Egyptian firms to increase the level of the disclosure concerning forward- looking information to attract new investment opportunities, and to issue an independent accounting standard that regulates preparation and disclosure of forward-looking information.
This study contributes to the accounting literature by helping in the development of an index to measure the level of disclosure of forward looking information and the analysis of the relationship between this level of FLID, cost of capital and efficiency of investment decisions in the Egyptian companies, as an example of emerging economies.
Key Words:
Forward looking information disclosure, cost of capital, efficiency of investment decisions.
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