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IMPACTS OF LEVERAGE ON SYSTEMATIC RISK BASED ON CAPITAL ASSET PRICING MODEL: A COMPARISON OF HIGH AND LOW CAPITAL INTENSIVE FIRMS |
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| รหัสดีโอไอ | |
| Creator | Mubeen Abdur Rehman, Muhammad Kashif Khurshid, Muhammad Iltaf, Muhammad Ans Hafeez, Muhammad Kashif |
| Title | IMPACTS OF LEVERAGE ON SYSTEMATIC RISK BASED ON CAPITAL ASSET PRICING MODEL: A COMPARISON OF HIGH AND LOW CAPITAL INTENSIVE FIRMS |
| Contributor | - |
| Publisher | TuEngr Group |
| Publication Year | 2563 |
| Journal Title | International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies |
| Journal Vol. | 11 |
| Journal No. | 5 |
| Page no. | 11A05H: 1-11 |
| Keyword | Systematic risk (beta), Degree of operating leverage (DOL), Degree of financial leverage (DFL), Degree of combined leverage (DCL), Firm size, Tobin's Q. |
| URL Website | http://TuEngr.com/Vol11_5.html |
| Website title | ITJEMAST V11(4) 2020 @ TuEngr.com |
| ISSN | 2228-9860 |
| Abstract | This study examines the relationship between leverage and systematic risk using high and low capital intensive firms for a period of six years (2010-2015). With the help of a simple random sampling technique, the data of 94 non-financial firms state the impact of leverage on systematic risk and it is found that degrees of operating leverage (DOL) and Degree of combined leverage (DCL) have significant while degrees of financial leverage (DFL) has an insignificant impact on systematic risk. Secondly, the core objective of this study is to differentiate the outcomes of high and low capital-intensive firms. Hence, the results concluded that in the case of high capital-intensive firms, the result of DOL and DFL is positively significant on systematic risk (beta). On the other hand, by compelling the low capital-intensive firms, the result is insignificant. The empirical results showed that capital intensity does influence leverage due to which leverage has a consistent impact on systematic risk. |
