We investigate how linguistic complexity relates to a company’s cost of equity capital. When management uses linguistic complexity to obfuscate information, we expect shareholders to require a greater return on equity. Our results show that, within a given firm, a decrease in the readability of the annual report is associated with an increase in the cost of equity capital. This finding remains after we extensively control for intrinsic business complexity. We also provide evidence of an effect of the readability of the information disclosed beyond the one attached to the quantity of information disclosed.