A Study of the Effects of Leverages Ratio on Systematic Risk based on the Capital Asset Pricing Model Among Accepted Companies in Tehran Stock Market
J. Educ. Manage. Stud., 3(4): 271 -277 , 2013
7 Pages Posted: 5 Oct 2012 Last revised: 8 Sep 2013
Date Written: September 8, 2013
Abstract
Systematic risk (Beta) is one of the most effective factors in predicting the appropriate required rate of return of portfolios. Understanding systematic risk of usual portfolio of various companies, investors consider financial investment more confidentially. The aim of this study is to determine if there is any significant relationship between Leverages ratio (Operating leverage, financial leverage, Compound Leverage) as independent variables and Systematic risk (Beta) as dependent variables. To do so 115 companies accepted in Tehran Stock Market were selected based on screening (systematic deletion) in an eight-year- period between "2005-2012". The required data were gathered from basic financial statement, committee reports, and other available documents in Tehran Stock Market. Regression and Pearson correlation were used to analyze the data. The results of the study revealed that there is not significant relationship between the variables. Some suggestions regarding the topic of the research are given too.
Keywords: Operating leverage, Financial leverage, Compound leverage, Systematic risk (Beta)
Suggested Citation: Suggested Citation