Using the Tucker-Zarowin (TZ) statistic of income smoothing, we find firms with higher income smoothing rankings exhibit lower cost of debt and higher credit ratings. Multivariate analysis reveals that firms with higher financial leverage and lower credit ratings experience are associated with higher borrowing costs, but that such borrowing costs can be reduced by smoothing reported income. Furthermore, larger firms and firms with greater stock return volatility and who exhibit higher income smoothing rankings experience relative higher borrowing costs. Results support the notion that for smaller firms with lower stock return volatility, income smoothing represents information signaling rather than garbling.

中文翻译：

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收入平滑和债务成本

使用收入平滑的Tucker-Zarowin（TZ）统计数据，我们发现收入平滑排名较高的公司表现出较低的债务成本和较高的信用评级。多元分析显示，财务杠杆较高和信用评级经验较低的公司与较高的借贷成本相关，但是可以通过使报告收入平滑来减少此类借贷成本。此外，较大的公司和股票收益波动较大且收入平滑排名较高的公司的借贷成本相对较高。结果支持这样的观点，即对于股票收益波动率较低的较小公司，收入的平滑代表信息的信号而非乱码。