The impact of textual features on cost of equity capital
: the case of UK annual reports

  • Renato Filipe Peixoto Carneiro (Student)

Student thesis: Master's Thesis


This thesis aims to analyze the impact of textual features of UK Annual Reports sections on the cost of equity. We analyze the impact of the Chairman Statement, Financial Review and Risk Section linguistic features separately, for the UK firms from 2012 to 2017. We estimate the cost of equity through the Price to Earnings Growth Model and the linguistic features are divided between readability and sentiment (tone). We find that disclosure content has an impact on cost of equity, while readability has is associated with no impact on cost of equity. We also find that positive tone is associated with lower cost of equity in all sections of the Annual Report.
Date of Award14 Jul 2021
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorPaulo Alves (Supervisor)


  • Cost of equity
  • Readability
  • Textual tone
  • Disclosure
  • Annual report


  • Mestrado em Finanças

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