This study examines the association between corporate split-off and the firm’s cost of equity capital. Critics argue that corporate split-off incurs economic costs for shareholders, leading to a significant decrease in stock returns. However, splitting a core division is also expected to increase the information environment for analysts. Based on these two competing arguments, we examine whether corporate split- off affects the cost of equity capital. Our results suggest that corporate split-off is negatively associated with the cost of equity capital. In addition, the negative association is significant for firms within the environment with higher information asymmetry. Our findings contribute to the literature by providing empirical evidence for the impact of corporate split-off on the parent firm’s cost of equity capital.