The Impact of CFO Behavioral Characteristics and Personality Traits On The Cost Of Capital

Abstract

This paper aims to identify the CFO characteristics and explore the influence of such characteristics on the cost of capital. To reach the research objectives, a questionnaire is distributed to the CFOs of the non-financial firms listed on the Egyptian stock exchange. Moreover, secondary data is gathered to get any needed data for the financial decision. The results of the regression report that three factors significantly impact the cost of capital which are CFO gender, optimism, and extraversion trait. The findings reveal the importance of including other determinants in the corporate models than the traditional determinants and this supports the behavioral finance theory. This paper contributes to the literature by exploring CFO characteristics that are not fully studied in a corporate finance context, especially in a developing market.