Anantharaman, Sekhar; Kline, Germain P.
September 2008
Review of Business Research;2008, Vol. 8 Issue 4, p93
Academic Journal
Parametric statistical tests on a select sample of NYSE stocks over the 1997-2006 period support the belief that corporations that have a higher than market adjusted beta, on average, yield greater accounting returns than those with lower than market adjusted beta. Corporations under risk classes measured by another market measure (unadjusted beta) and two book measures (financial leverage and interest coverage capacity) do not exhibit any significant differences in both accounting and market rates of return. On the other hand, nonparametric analyses of the same data provides support only to the belief that corporations that have a lower (less than 4 times) interest coverage ratio (more risky), on average, yield greater accounting returns than companies with a higher (greater than or equal to 4 times) interest coverage ratio (less riskier).


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