Gabriela Chmelíková, Kristina Somerlíková
Risk Substance of Newly Established Businesses
Číslo: 2/2018
Periodikum: Statistika
Klíčová slova: Risk measurement, start-up business, degree of operating leverage, degree of financial leverage
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Anotace:
This paper investigates the risk substance of newly established business in the Czech Republic. As traditional
methods for risk measurement in this case come across the lack of reliable data from capital markets, lack
of any financial history for start-up companies and low level of diversification of investors, we draw on the theory
of business risk and empirically investigate the role that risk fundamentals may play in the overall riskiness
of start-up firms in the Czech Republic. Our findings confirm that the return fluctuations of start-up companies
are statistically significantly associated with the operating and financial leverage.
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methods for risk measurement in this case come across the lack of reliable data from capital markets, lack
of any financial history for start-up companies and low level of diversification of investors, we draw on the theory
of business risk and empirically investigate the role that risk fundamentals may play in the overall riskiness
of start-up firms in the Czech Republic. Our findings confirm that the return fluctuations of start-up companies
are statistically significantly associated with the operating and financial leverage.