The Relationship between Risk Management Reporting and Cost of Capital by Interest and Dividend Payments: A Case Study of Listed Companies in the Market for Alternative Investment

Abstract

The objectives of this study were to investigate the level of risk management reporting and to test the relationship between risk management reporting and cost of capital by interest payment and dividend payment of listed companies from the Market for Alternative Investment (MAI). Samples were 118 firms from the MEI excelling in the financial industry during 2016-2018. The study found that the most common level of risk management reporting was in operational risk, while investment risk was the less common level of reporting. The study also found a negative relationship between shareholder right risk management reporting and interest payment, while there was a positive relationship between operational risk management reporting and dividend payment. Moreover, the study found a relationship between risk management reporting, the cost of capital and profitability.