prefix: doi.org/10.52283/1.ajbmr |
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Current Issue: Vol.09 No.01 2024
Ajbmr indexed in Australian Business Dean Council (ABDC) | Find us on: Academic Journals Database, World Cat , ISI
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Exploring the Dynamics Between Leverage and Systematic Risk of Equity Stocks: The Mediating Influence of Profitability and the Moderating Impact of Firm Size
►Wadumesthrige Don Lalith Siriwardena
6115FM2021036@fgs.sjp.ac.lk (Corresponding Author)
http://orcid.org/0009-0007-2699-7311
► Yatiwelle Koralalage Weerakoon
► Pullkkutti Arachchilage Niluka Surangi Anuradha
Received: 11 June, 2024
Final Revision: 25 September, 2024
Accepted: 01 October, 2024
Published: 31 October, 2024
10.52283/NSWRCA.AJBMR.20240802A03
AbstractThis inquiry embarks on a rigorous examination of the existing scholarly works to unravel the complex interplay between leverage and the inherent systematic risk on equity stocks, shedding light on how profitability mediates this relationship and how firm size further influences these dynamics in an organizational scale throughout many decades spanning 1979 to 2024. The study has three key objectives. 1). To aggressively examine and critically analyze prior studies that have explored the relationship between leverage and the systematic risk of equity stocks. 2). To meticulously scrutinize and evaluate studies exploring the intermediary impact of profitability on the correlation between leverage and the systematic risk of equity stocks. 3). To uncover previous studies that have examined the credible moderating effect of company size on the relationship between leverage and systematic risk of equity stock. Inquiry adopted the PRISMA 2020 benchmark in systematic review of the meticulous dissection of numerous prior studies and adoption ensured a structured and advanced academic approach in examining and synthesizing the extant body of literature. The findings starkly reveal a critical void in scholarly literature regarding exhaustive examinations of the intricate interplay between leverage and systematic risk in equity stocks. This void is glaringly evident due to the absence of a consolidated and robust framework that accommodates the diverse array of this study context. The mediating role of profitability in this relationship is largely unexplored across multiple contexts. Additionally, the moderating role of company size in the relationship between leverage and systematic risk has not been widely studied within a unified model.Keywords: Operating Leverage, Financial Leverage, Systematic Risk, Equity Stock, Profitability, Firm Size
Pages:26-39 :: Download-View
