We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
DEBT AND RISK: A TECHNICAL NOTE.
- Authors
Chung, Kee H.
- Abstract
It is shown that there is a theoretical inverse relation between the firm's operating risk and financial leverage. Compared to Ross's study, the present approach is technically simpler and provides an easier-to-measure definition of the firm's operating risk. In particular, this study establishes a direct link between the firm's financial structure and an ordinary risk measure for common stocks, unlevered beta. Since both variables are readily observable, the result of this study would facilitate future empirical tests.
- Subjects
RISK; DEBT; FINANCIAL leverage; FINANCIAL management; CORPORATE finance; STOCKS (Finance)
- Publication
Journal of Business Finance & Accounting, 1989, Vol 16, Issue 5, p719
- ISSN
0306-686X
- Publication type
Article
- DOI
10.1111/j.1468-5957.1989.tb00049.x