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The Dependent Variable of the model is systematic risk [beta] and the independent variables being is Capital Structure (Leverage), which is alternatively measured by Total Debt to Total Assets (TDTA), Total Debt to Total Equity (TDTE), Long Term Debt to Total Assets (LTDTA), and Short-Term Debt to Total Assets (STDTA), profitability, growth and corporate size.
Four measures of leverage are used in the study: TDTA, TDTE, LTDTA and STDTA.
The total debt to total assets (TDTA) for the sample as a whole is 34.32%, minimum is 0.0%, maximum is 97.32% and standard deviation of TDTA is 25.36%.
On comparison to the international data given in the Zingales and Rajan (1995), other companies have a lower TDTA ratio as compared to companies of G7 nation TDTE i.e., 163% versus France (220%), Germany (257%), Japan (201%) and United States (194%).
The results showed that there was a positive relationship between growth and TDTA, growth and LTDTA, while TDTE and STDTA has a negative relationship with growth.
Moreover, for the other variables like DI and BETA, wherein DI has positive relationship with TDTA, LTDTA, STDTA while TDTE, growth and size are in negative relation with DI.
The results showed that there was a positive relationship between BETA and TDTE, BETA and LTDTA, growth and BETA, size and BETA, while TDTA, STDTA and DI has a negative relation with BETA.
From the regression results in Table I, corporate size was found to have a positive and significant effect on the leverage measures LTDTA and STDTA, but was not significantly related to TDTA and TDTE leverage measures.
In hypothesis 2 ([H.sub.2]), the relationship of systematic risk beta is seen with corporate capital structure measured by TDTA, TDTE, LTDTA and STDTA.
In the table a similar result can be seen, that the profitability to increase with the risk with a value of 0.006618 with TDTA, this value further increases with TDTE 0.013834 and attains its maximum value, and is 0.008974 with LTDTA and 0.007334 with STDTA.
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- TDTH cells