We investigate the impact of information disclosure on idiosyncratic volatility. We show that more precise information about the future cash flows results in lower beta and consequently lower costs of capital. At the same time, lower beta mechanically produces higher idiosyncratic volatility. If information disclosure by different companies is purely random then idiosyncratic volatility remains truly idiosyncratic from period to period. But, if there is a pattern behind disclosures common to a large number of firms then a commonality in idiosyncratic volatility may follow. Finally, we argue that agency problems may endogenously determine precision of disclosures and accordingly, provide a cross-sectional characteristic leading to changes in beta and ivol.