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Purpose- The purpose of this research is to identify the determinants that shape the Egyptian firms' risk disclosure practices and to further examine the impact of risk disclosure on the firm’s cost of equity capital. Design/methodology/approach- This research is descriptive and empirical in scope, it will attempt to directly measure the cost of equity using one of the best models used in this regard, which is the capital assets pricing model (CAPM). The analysis will be based on a sample of firms listed in the EGX 100-index. Information in annual financial reports for each firm for the period (2016-2018) will be sought and analyzed. More importantly, EGX- 100 firms are Egypt’s largest, audited by the biggest firms and tend to be well monitored; hence, the selection will ensure analysts' forecasts accuracy. Findings- All the EGX 100 Egyptian listed companies disclose risk-related information on their annual reports, however, the level of risk reporting in the Egyptian environment is low comparable to the developed countries. Egyptian firms tend to disclose more qualitative and backward-looking risk information when referring to bad news, while they tend to disclose forward-looking and also qualitative information when referring to good news. Factors such as firm characteristics, corporate governance mechanisms and ownership structure are key determinants of risk reporting practices of Egyptian firms. Practical implications- The findings of this research regarding the impact on cost of equity capital should be on concern to companies’ management. Originality/value- This research will contribute to the existing literature by identifying factors that determine risk reporting. The research will be useful both in assisting regulators and investors in identifying the type of risk information disclosed by different firms in different sectors and by identifying the characteristics of firms disclosing such information. Finally, this research contributes to the existing literature by examining the usefulness of this information by empirically testing the association between risk disclosure and firm's cost of equity capital.
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