Abstract:
Over the years there has been an increased trend towards application of corporate governance practice all over the world following major corporate scandals. The role of corporate disclosure practice has been of growing interest prompting for re-examination and scrutiny of policy on voluntary information disclosure. The objective of this is to determine the effect of voluntary disclosure on the Cost of Equity Capital of companies quoted at the Nairobi Securities Exchange. To achieve this, the study sought to examine the effect of forwardlooking information, Corporate Social Responsibility information and Corporate Strategic information on the Cost of Equity Capital. The study was based on agency theory, capital need theory, signaling theory and stakeholder’s theory. Descriptive research design was applied to attain the objectives of the study. The target population was companies currently listed in Nairobi Securities Exchange, however purposive sampling was used to select 20 companies from the NSE 20 share index.NSE is subdivided into 11 different sectors. Secondary data applied in the study was extracted from NSE handbooks, Capital Market Authority, annual reports and accounts of firms listed at NSE from a period of 5 years from 2012 to 2016. Data was analyzed using STATA. Results of the study indicated a positively insignificant relationship between voluntary disclosure of forward-looking, corporate social responsibility and strategic disclosure on the cost of equity capital. Additionally voluntary disclosure explained 9.28% on the variation in the cost of equity capital.
