The Impact of a One Factor Model on Risk Level of Viet Nam Medicine Industry
This research paper evaluates the impacts of external financing (one factor model) on market risk for the listed firms in the Viet nam medical industry as it becomes necessary, esp. after the financial crisis 2007-2009. 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, we found out that the beta values, in general, for many institutions are acceptable. Second, 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. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.
Dinh Tran Ngoc Huy
Banking University Ho Chi Minh City, Vietnam and Graduate School of International Management, International University of Japan, Niigata, Japan.
Nguyen Thi Phuong Thanh
Thai Nguyen University of Information Technology and Communications, Vietnam.
Luong MInh Lan
Van Lang University, Ho Chi Minh City, Vietnam
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