European Journal of Scientific Research ISSN 1450-216X / 1450-202X Vol. 157 No 1 July, 2020, pp.17 - 26 http://www. europeanjournalofscientificresearch.com The Effect of Voluntary Disclosure on the Cost of Capital: Evidence from Jordan Omar Mohammed Zraqat Assistant Professor, Faculty of Business & Finance The World Islamic Sciences & Education University (W.I.S.E), Amman, Jordan E-mail: omarmfz@hotmail.com Abstract This study aimed to evaluate the level of voluntary disclosure contained in the annual reports of banks listed on the Amman Stock Exchange. and explore the effect of the level of voluntary disclosure on the cost of capital of Jordanian commercial banks listed on the stock exchange. The correlation between disclosure and the cost of capital is proposed through the signal theory that indicates that increased corporate disclosure works to reduce the inconsistency of information between companies and investors, and thus influence the capital cost of the study sample banks. The study population consists of all 13 Jordanian commercial banks, and the five banks were included in the study sample. Information sources represent secondary sources, which were represented by financial data extracted from financial statements, annual reports, and information about commercial banks listed on the Amman Stock Exchange for the period (2008-2018) published on the financial market website in Jordan. The study found that there is a difference between the banks listed on the Amman Stock Exchange in terms of the level of voluntary disclosure and that the level of application of voluntary disclosure is medium between Jordanian banks, in addition to a statistically significant relationship that occurs between capital cost and voluntary disclosure of Jordanian commercial banks. The study recommends that Jordanian commercial banks should increase the level of voluntary disclosure in their financial reports due to the apparent impact on the cost of capital. Keywords: Voluntary, Disclosure Cost of Capital, Jordanian commercial banks. Introduction The importance of information in markets is expressed by Fama (1970) in the efficient market hypothesis (EMH). According to Fama (1970), aspects of information available to investors and potential investors are at the core of the EMH, so the price of a security should accurately reflect the use of information quickly and fully reflecting. Although in reality there is no truly efficient market, the EMH has laid the foundation that efficient markets must be linked to information systems, assuming all market participants capture the signals contained in the information and make decisions immediately. The signaling theory states that the main purpose of corporate disclosure is to provide users of financial reports with information about the quality and value of company data. This indicates that voluntary disclosure decisions lead to reporting information related to the company's performance and value, which will be reflected in the decisions of investors in financial markets, money providers and all related parties (Connelly et al., 2011). Emerging markets suffer from a decrease in investor