Global Advanced Research Journal of Management and Business Studies (ISSN: 2315-5086) September 2015 Vol. 4(8), pp 338-345

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Original Research Articles

To What Extent Changing Tax Policy and External Financing Influence the Risk Level of Viet Nam Stock Investment Industry During and after the Global Crisis

Dinh Tran Ngoc Huy

MBA, PhD candidate, Banking University, Ho Chi Minh, Viet Nam - GSIM, International University of Japan, Japan.Email: dtnhuy2010@gmail.com. Skype: dinhhuy121

Accepted 31 August 2015

Abstract 

Over past few years, the global financial crisis shows certain influence on emerging financial markets including Viet nam. Therefore, this study chooses a analytical approach to give some systematic opinions on how much some certain determinants such as income tax and leverage, affect the level of market risk in listed stock investment organizations. First, it calculates equity and asset beta values in three (3) different scenarios of changing tax rates and changing the level of financial leverage. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is not large disperse in equity beta values, estimated at 0,118 for current leverage situation. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), we recognized both equity and asset beta mean values have positive relationship with the increasing level of tax rate. Last but not least, this paper covers some ideas and policy suggestions.  

Keywords: Risk management, Asset beta, Financial crisis, Corporate tax, Leverage