1. We read some information on Emerging Growth Companies. How would you design a scientific study on the relationship between EGC status, information asymmetry, the cost of capital, and earnings quality? What would your hypotheses be? What results would you anticipate finding?

1. Financial research should be conducted and analyzed to determine the factors impacting information asymmetry. The entity earnings included in the company statement can impact the degree of information asymmetry. The information related to earnings of the emerging growth companies is very essential in taking key decisions for the businesses. High-quality information related to company growth can be a good assessment tool for the measurement of emerging entity growth. As per the signaling theory, if quality information about the company's financial data is published then the users or the investors can get signals as to how the company earnings are linked with the company's growth. Information asymmetry can be decreased or reduced if the company has quality earnings. If the management of the organization bears the cost of capital then there will be an increase in the information asymmetry level. According to the research and analysis, it has been found that the cost of capital of the entity will be positively affected by the information asymmetry level. It has been examined that information asymmetry can act as a variable to study the effect on a company's cost of capital from company quality earnings data. If the relationship between EGC status, cost of capital of entity, quality earnings, and information asymmetry are tested then the results derived from the integrated testing can be a great advantage for company management as well as company shareholders and investors (Vitolla, et.al, 2020).

1. We read some information on Emerging Growth Companies. How would you design a

Get Instant Homework HelpOn Your Mobile

Get Instant Homework HelpOn Your Mobile

Get Instant Homework HelpOn Your Mobile