Income smoothing and cost of capital


  • Si Ayu Intan Kezia Dewi Udayana University, Denpasar, Indonesia
  • Dewa Gede Wirama Udayana University, Denpasar, Indonesia
  • I Made Sukartha Udayana University, Denpasar, Indonesia
  • I Gusti Ngurah Agung Suaryana Udayana University, Denpasar, Indonesia



capital cost, control variable, income smoothing, institutional ownership, leverage


This study aims to obtain empirical evidence about the effects of income smoothing on the cost of capital. Four additional control variables are used, namely information risk, company size, institutional ownership, and leverage. The population in this study are all manufacturing companies listed on the Indonesia Stock Exchange from 2014 to 2018, based on purposive sampling technique, the samples used in this study were 213 companies. Test results show that (1) income smoothing has a negative effect on the cost of capital, (2) Information risk, company size, and institutional ownership have no influence on the relationship between income smoothing and the cost of capital, (3) leverage affects the relationship between income smoothing and the cost of capital.


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How to Cite

Dewi, S. A. I. K., Wirama, D. G., Sukartha, I. M., & Suaryana, I. G. N. A. (2020). Income smoothing and cost of capital. International Journal of Business, Economics & Management, 3(1), 117-122.