A Five Factor Model on the Risk Level of Viet Nam Hardware Industry During and after the Global Crisis

Abstract

In recent years, hardware industry in Viet Nam has reached many achievements. Under the volatility of stock price, and changes in macro factors such as inflation and interest rates, the well-established hardware market in Viet Nam has many efforts to recover and grow from the crisis 2008. This study analyzes the impacts of 5 factors: time point, competitor size, competitive equity determinant, tax rate policy, and leverage on market risk for the listed firms in the hardware industry as it becomes necessary. First, by using quantitative and analytical methods to estimate asset and equity beta of total 22 listed companies in Viet Nam hardware industry with a proper traditional model, we found out that the beta values, in general, for many companies are acceptable. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is the largest dispersion in asset beta value (0,545), if leverage down to 20% and debt plus equity current competitor for the whole year 2011. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), this study identified that the risk dispersion level in this sample study could be reduced in case the competitor size as current and based on debt plus equity selection, current tax rate of 25% and financial leverage down to 20% (measured by asset beta var of 0,081). Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.