Equity Beta Values Research Articles

Changing Tax Rates Impacts on the Risk Level of Viet Nam Construction Material Firms

The Viet Nam stock market has been affected by the financial crisis 2007-2009. This study analyzes the impacts of tax policy on market risk for the listed firms in the construction material industry as it becomes necessary. First, by using quantitative and analytical methods to estimate asset and equity beta of total 57 listed companies in Viet Nam construction material 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 not large disperse in equity beta values, estimated at 0,957, 1,011 and 0,961.These values are lower than those of the listed VN construction firms. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), we recognized equity /asset beta mean and asset beta var increase if tax rate increases from 20% to 25%, then decrease when tax rate goes up from 25% to 28%. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.

The Volatility of Market Risk in Viet Nam Listed Medical Company Groups During and After the Financial Crisis 2007-2009

The research analyzes the data of total 14 listed firms of related medical industry in the Viet Nam economy and especially, the stock exchange which has been affected by the global crisis during the period 2007-2011. First, using quantitative and analytical methods to estimate asset and equity beta values of three (3) groups of sub-medical listed companies in Viet Nam Medicine, Medical equipment and Human resource industries with a suitable traditional model, we found out that the beta values, in general, for most companies are acceptable, excluding a few cases. There are 57% and 71% of listed firms with lower risk, among total 14 firms, whose beta values lower than ( ) 1 and have stock returns fluctuating more than the market index, indicated by equity and asset beta, accordingly. Third, there are exceptional cases with beta lower than (<) 0, with 21% of firms whose equity and asset beta < 0, showing stock movement in an opposite direction to the market. Finally, this paper generates some outcomes that could provides both internal and external investors, financial institutions, companies and government more evidence in establishing their policies in investments and in governance.

The Volatility of Market Risk in Groups of Viet Nam Listed Medicine and Medical Company Groups during and after the Financial Crisis 2007-2011

This survey uses the sample of total 14 listed firms of related medical industry in the Viet Nam economy and especially, the stock exchange which has been affected by the global crisis during the period 2007-2011. Specifically, we perform the risk re-analysis and estimation for the listed firms in Medicine, Medical equipment and Human resource industries. First of all, using quantitative and analytical methods to estimate asset and equity beta values of three (3) groups of sub-medical listed companies in Viet Nam Medicine, Medical equipment and Human resource industries with a suitable traditional model, we found out that the beta values, in general, for most companies are acceptable, excluding a few cases. There are 57% and 71% of listed firms with lower risk, among total 14 firms, whose beta values lower than ( ) 1 and have stock returns fluctuating more than the market index, indicated by equity and asset beta, accordingly. Ultimately, this paper generates some outcomes that could provides both internal and external investors, financial institutions, companies and government more evidence in establishing their policies in investments and in governance.

The Measurement of Impacts of External Financing on the Risk Level of Viet Nam Hotel and Entertainment Industry During and after the Global Crisis 2007-2011

AbstractThis paper estimates the impacts of external financing on market risk for the listed firms in the Vietnam hotel and entertainment industries, esp. after the financial crisis 2007-2009 first, by using quantitative and analytical methods to estimate asset and equity beta of total 12 listed companies in Vietnam hotel and entertainment industry with a proper traditional model. We found out that the beta values, in general, for many institutions are acceptable.Secondly under 3 different scenarios of changing leverage (in 2011 financial reports, 30% up and 20% down), we recognized that the risk level, measured by equity and asset beta mean, decreases when leverage increases to 30% and vice versa. Third, by changing leverage in 3 scenarios, we recognized the dispersion of risk level increases (measured by equity beta var) if the leverage decreases down to 20%.Keywords: Equity beta, financial structure, financial crisis, risk, external financing, entertainment industry.IntroductionFinancial system development is positively related to the economic growth and Vietnam hotel and entertainment industry is considered as one of active economic sectors. The issues are:Issue 1 : Whether the risk level of hotel and entertainment firms under the different changing scenarios of leverage increase or decrease so much.Issue 2: Whether the dispersed distribution of beta values becomes large in the different changing scenarios of leverage estimated in the hotel and entertainment industry.Conceptual theoriesThe impact of financial leverage on the economy: A sound and effective financial system has positive effect on the development and growth of the economy. Financial institutions not only help businesses to reduce agency problems but also enable them to enhance liquidity capacity and long-term capital. Financial innovation also reduces the cost of diversification. In a specific industry such as consumer good industry, on the one hand, using leverage with a decrease or increase in certain periods could affect tax obligations, revenues, profit after tax, technology innovation, compensation and jobs of the industry.During and after financial crises such as the 2007-2009 crisis, there were concerns about the role of financial leverage of many countries in both developed and developing markets. On the one hand, lending programs and packages might support the business sectors. On the other hand, it might create more risks for the business and economy.MethodologyIn order to calculate systemic risk results and leverage impacts, we used the live data during the crisis period 2007-2011 from the stock exchange market in Viet Nam (HOSE and HNX and UPCOM). In this research, analytical research method is used, philosophical method is used and specially, leverage scenario analysis method is used. Analytical data is from the situation of listed hotel and entertainment firms in VN stock exchange and curent tax rate is 25%.Finally, we use the results to suggest policy for both these enterprises, relevant organizations and government.General Data AnalysisThe research sample has total 12 listed firms in the hotel and entertainment market with the live data from the stock exchange. First, we estimate equity beta values of these firms and use financial leverage to estimate asset beta values of them. Secondly, we change the leverage reported in F.S 2011 to increasing 30% and reducing 20% to see the sensitivity of beta values. We found out that in 3 cases, asset beta mean values are estimated at 0,262, 0,216 and 0,326 which are negatively correlated with the leverage. Also in 3 scenarios, we find out equity beta mean values (0,409, 0,362 and 0,462) are also negatively correlated with the leverage. Leverage degree changes definitely have certain effects on asset and equity beta values.DiscussionData used are from total 12 listed hotel and entertainment companies on VN stock exchange (HOSE and HNX mainly). …

Industrial structures components of finance theory's CAPM

A microeconomic pricing model is developed which explains the effects of industrial structures on profit margin and equity beta values. The model is placed into special use by illustrating what may appear to be contradictions in the stock prices and betas of specific companies, differences which are explained however by the theory that supports our model. The industrial organization theory established in the paper would therefore extend Finance Theory's Capital Asset Pricing Model. Many testable propositions which could disconfirm or fail to disconfirm certain facets of, if not the paper's basic theory, are set forth descriptively.