African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4193

Full Length Research Paper

Financial leverage and systematic risk

Kheder Alaghi
Department of Accounting, Armenia State Agrarian University, Armenia.
Email: [email protected]

  •  Accepted: 17 May 2011
  •  Published: 04 August 2011

Abstract

The aim of this study is the effect of financial leverage in the systematic risk of listed companies in Tehran Stock Exchange. In this study, financial leverage (FL) as independent variables and systematic risk (β) as the dependent variable is considered.  While significant at ≤ 0/05 H0 hypothesis, is rejected. Otherwise, there is no other adequate reason for rejecting H0 hypothesis. For testing the hypothesis of this study, linear regression technique has been used. According to the results obtained, H0 is rejected because significant = 0.00< 0.05. Thus, financial leverage has effect on the systematic risk of listed companies in Tehran Stock Exchange.

 

Key words: Financial leverage, capital structure, systematic risk, operating leverage, earnings per share (EPS), earnings before interest and taxes (EBIT).

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This article is published under the terms of the Creative Commons Attribution License 4.0

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