THE RISK LEVEL OF VIET NAM MEDICINE AND MEDICAL EQUIPMENT INDUSTRIES UNDER FINANCIAL LEVERAGE DURING AND AFTER THE GLOBAL CRISIS 2007-2009
Journal Title: Journal of Entrepreneurship, Business and Economics - Year 2014, Vol 2, Issue 1
Abstract
Purpose- This research paper evaluates the impacts of external financing on market risk for the listed firms in the Vietnam medical industry as it becomes necessary, esp. after the financial crisis 2007- 2009. Design/methodology/approach- First, by using quantitative and analytical methods to estimate asset and equity beta of total 10 listed companies in Viet Nam medical industry with a proper traditional model. Second, we used three scenarios. Finally, leverage changed in three scenarios. Findings- We found out that the beta values, in general, for many institutions are acceptable. 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 it increases in case leverage down to 20%. Third, by changing leverage in 3 scenarios, we recognized the dispersion of risk level, measured by equity beta var, increases if the leverage increases to 30%. Compared to the results of other industries, we see that asset beta var in here increases when leverage up to 30% as well as that in consumer good industry. Originality/value- Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.
Authors and Affiliations
Dinh Tran Ngoc Huy
Keywords
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