The effect of firm size on the relation between disclosure quality and cost of equity interest of listed companies in Tehran stock exchange

Accurate and timely disclosure of information is one of the important tools of corporate managers which reduce the cost of capital. However, larger companies gain more benefit than smaller companies because of improve and raising the level of disclosure. In this study, the moderating effect of firm size on the relationship between disclosure quality and the cost of equity capital has been examined. The period of time for this research is between the years 1382 to 1389. The population of interest is consisted of all the listed companies in Tehran stock exchange. After applying restrictions corresponding to the sample selection rules, 98 companies were selected as a sample by random. In previous studies, where the relationship between disclosure and cost of equity was to be tested, size is included as a control variable. it is shown in general, for large companies there is a significant and negative relationship between disclosure quality and cost of equity capital. On the other side, for companies smaller than average such as relationship is not visible. According to this study Investors and other participants in market could access to useful information respect to disclosure benefits and it’s relation to cost of capital of interest given to its size. So it stimulate them in market and somehow change in position of domestic stock market and also it leads to more attention to firms disclosure , level of disclosure and firm size.