The disclosure behaviour of REITs and its consequences

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School of Business | Bachelor's thesis
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Date

2024

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Mcode

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Laskentatoimi

Language

en

Pages

27

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Abstract

Real estate investment trusts (REITs) are companies that own and operate income-generating real estate. They operate in a unique tax and regulatory environment. REITs are required to pay most of their income as dividends and thus they able to avoid corporate level income taxation. For this reason, REITs need to access the capital markets often. Transparency and disclosures are particularly important for REITs as they help lower the costs of external capital. If information asymmetry is high, raising external capital is going to be more difficult. Hence, REITs have strong incentives for increased disclosure quality. REITs with greater transparency have a better performance. The transparency of REITs is higher when disclosure is more detailed and higher quality. REITs increase their disclosure especially around capital market accessing in order to lower the costs of capital

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Thesis advisor

Pham, Ly

Keywords

REIT, disclosure, transparency, information asymmetry

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