The risk level of Viet Nam human resource and medical equipment industry under financial leverage during and after the global crisis 2009-2011

Abstract

This paperwork evaluates the impacts of external financing on market risk for the listed firms in the Viet nam HR and medical equipment industry, esp. during and after the financial crisis 2009-2011. First of all, by using quantitative and analytical methods to estimate asset and equity beta of total 6 listed companies in Viet Nam HR and medical equipment 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% but increases more if leverage decreases down to 20%. Third, by changing leverage in 3 scenarios, we recognized the dispersion of risk level, measured by equity beta var, decreases from 0,404 to 0,387 if the leverage increases to 30% whereas decreases to 0,388 if leverage decreases to 20%. But the dispersion measured by asset beta var decreases to 0,138 (leverage down 20%), showing leverage impact. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.