Brown Bag Seminar with Peter Ove Christensen, Copenhagen Business School

The Department of Finance is pleased to announce the upcoming Brown Bag Seminar with Peter Ove Christensen, Copenhagen Business School.

Peter Ove Christensen will present

Public Information and Efficient Capital Investments: Implications for the Cost of Capital and Firm Values

ABSTRACT
In a standard financial economics model of asset pricing and value maximizing firms, we show better public information about firm-specific and economy-wide events facilitates a more efficient allocation of capital among firms as well as more efficient aggregate capital investments. Thus, investor welfare increases as the informativeness of public information increases. On the other hand, we also show that improvements in investor welfare due to better public information are often associated with a higher cost of capital and with lower firm values.

Slides