Abstract:In this paper, we use A shared listed companies in Shanghai and Shenzhen from 2000 to 2011 as samples, and explore the relationship between accounting conservatism and the cost of capital in the context of the equity division reform. The results show that, the higher the degree of accounting conservatism, the lower the cost of equity capital and debt capital. After corporate equity division reform, the negative relationship between accounting conservatism and the cost of debt capital is significantly enhanced. We find that the negative relationship between accounting conservatism and cost of equity capital make no difference after equity division reform.