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Private information puts naïve traders at a significant trading disadvantage and at the same it provide crucial signals managers for investment adjustment. These two forces have opposing effects on the cost of equity, and the overall effect is determined by which force dominates. For clinching this effect, this study finds out how investment adjustment plays the moderating role between private information and COE. The study employs data of non-financial firms listed on PSX from 2008 to 2019. Further, the study employs a two-step system GMM dynamic panel estimator to analyze the data. The findings of the study show that companies with a low investment adjustment flexibility known as "value firms" do not gain as much from information incorporated in market prices compared to firms having high flexibility in adjusting investment "growth firms." This study adds to the literature by revealing unique insight on the effect of investment adjustment in reducing the influence of private information on COE and corporate investment as well. JEL classification: D82, G14, G410. [ABSTRACT FROM AUTHOR]