The Impact of Intellectual Capital on the Weighted Average Cost Capital and Cost of Equity

In today's knowledge-based industries, intellectual capital plays more important role than financial capital in creating value for business units. The accounting system also plays a crucial role in finding appropriate ways to achieve perfect methods for evaluating intellectual capital. Lack of the reflection of intellectual assets value in financial reports ofbusiness units is one of the most obvious defects of traditional accounting systems. This study investigates therelationship among intellectual capital, weighted average cost capital (WACC) and cost of equity of companies listed in Tehran Stock Exchange for a period of eight years from 2007 to 2014. In order to measure intellectual capital, value added of intellectual capital and value added of the capita; applied were used. To this aim, Palik model, which is one ofthe most commonly used methods for measuring intellectual capital, was used to calculate the required data. To analyzethe data, some statistical analyses such as Pearson correlation, univariate and multivariate regressions and Wang Z-testwere performed. The results show a relationship among intellectual capital, weighted average cost capital and cost of equity

Keywords:

value added of intellectual capital , value added of intellectual capital coefficient , value added of capital applied , weighted average cost of capital , firm value , financing costs