IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-00450167.html
   My bibliography  Save this paper

The impact of leverage reduction on the equity risk level of the firm : an exploratory study of French firms

Author

Listed:
  • Rahim Bah

    (GDF - Gestion, Droit et Finance - EESC-GEM Grenoble Ecole de Management)

Abstract

Although it is admitted that financing decisions affect the equity risk of the firm, few studies have been dedicated to the analysis of the relationship between risk and leverage. In fact, to our knowledge, no study has addressed the question of whether leverage reduction has an effect on equity risk. This exploratory paper addresses this issue using data on French firms. The results of the study show that leverage reduction significantly reduces equity risk. However, an indirect test of the relative importance of this effect indicates that the reduction may not lead to shifts in risk classes. In other words, asset risk is the more important risk factor.

Suggested Citation

  • Rahim Bah, 2000. "The impact of leverage reduction on the equity risk level of the firm : an exploratory study of French firms," Working Papers hal-00450167, HAL.
  • Handle: RePEc:hal:wpaper:hal-00450167
    Note: View the original document on HAL open archive server: http://hal.grenoble-em.com/hal-00450167
    as

    Download full text from publisher

    File URL: http://hal.grenoble-em.com/hal-00450167/document
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00450167. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.