Sarmiento-Sabogal, Julio; Sadeghi, Mehdi - In: The North American Journal of Economics and Finance 30 (2014) C, pp. 90-105
The present paper calculates the systematic risk within the context of the capital asset pricing model to investigate the significance of financial leverage on systematic risk. Rather than testing the unlevered beta directly, we develop a multinomial model with theoretically predicted targets in...