Open AccessThe effect of the board of directors’ characteristics on the cost of capital of the French companies
Author(s) -
Daniel Zéghal,
Raef Gouiaa
Publication year - 2009
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv7i1c2p1
Subject(s) - cost of capital , profitability index , business , cost of equity , accounting , capital (architecture) , sample (material) , equity (law) , weighted average cost of capital , index (typography) , capital cost , debt , finance , economics , financial capital , market economy , capital formation , human capital , incentive , chemistry , archaeology , chromatography , political science , law , history , macroeconomics , world wide web , computer science
The board of directors and the cost of capital play fundamental roles in the profitability and the perennity of any business organization. The objective of this research is to try to evaluate the effect of the board of directors’ characteristics on the cost of capital of the French companies. The results of this study, based on a sample of 87 French companies belonging to the French index SBF120 during 2005, show that the majority of the board of directors’ characteristics have an important and significant effect on the cost of equity capital, on the cost of debt and on the balanced average cost of capital of the French companies