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

See all articles by Peyman Akbari

Peyman Akbari

Department of Management, Payame Noor University, I.R. of Iran; Department of Management, Payame Noor University, I.R of IRAN

Ehsan Mohammadi

Master Student of Accounting, Islamic Azad University, Hamedan Branch, Hamedan, Iran

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

Akbari, Peyman and Akbari, Peyman and Mohammadi, Ehsan, 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 (September 8, 2013). J. Educ. Manage. Stud., 3(4): 271 -277 , 2013, Available at SSRN: https://ssrn.com/abstract=2156833

Peyman Akbari (Contact Author)

Department of Management, Payame Noor University, I.R. of Iran ( email )

kermanshah
Iran

Department of Management, Payame Noor University, I.R of IRAN ( email )

kermanshah
Iran

Ehsan Mohammadi

Master Student of Accounting, Islamic Azad University, Hamedan Branch, Hamedan, Iran ( email )

Hamedan
Iran

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