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Is goodwill a factor of stock market risk - A study of the Stockholm Stock Exchange

Svensson, Robin and Ericsson, David (2011)
Department of Business Administration
Abstract
The purpose of this study was to examine the connection between goodwill intensity and stock market risk and how the transition to the IFRS has effected this connection. In the end of 2010 several financial analysts expressed their concerns about the increasing goodwill intensity in listed Swedish corporations. However, in this study examining the connection between goodwill intensity and stock market risk, we found no basis for these concerns. The study also showed that the transition to the IFRS have not increased the connection between goodwill intensity and stock market risk which was the theoretical perception. On the contrary, we found a weakened connection between the two variables. It is however also to be highlighted that even... (More)
The purpose of this study was to examine the connection between goodwill intensity and stock market risk and how the transition to the IFRS has effected this connection. In the end of 2010 several financial analysts expressed their concerns about the increasing goodwill intensity in listed Swedish corporations. However, in this study examining the connection between goodwill intensity and stock market risk, we found no basis for these concerns. The study also showed that the transition to the IFRS have not increased the connection between goodwill intensity and stock market risk which was the theoretical perception. On the contrary, we found a weakened connection between the two variables. It is however also to be highlighted that even though there is no apparent connection on an aggregated level between goodwill intensity and stock market risk, an individual companies could still be subject to an increased risk due to a high level of goodwill intensity. (Less)
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author
Svensson, Robin and Ericsson, David
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
Management of enterprises, IFRS, regulation, beta, goodwill, risk, Företagsledning, management
language
Swedish
id
1982621
date added to LUP
2011-06-01
date last changed
2012-11-12 11:40:35
@misc{1982621,
  abstract     = {The purpose of this study was to examine the connection between goodwill intensity and stock market risk and how the transition to the IFRS has effected this connection. In the end of 2010 several financial analysts expressed their concerns about the increasing goodwill intensity in listed Swedish corporations. However, in this study examining the connection between goodwill intensity and stock market risk, we found no basis for these concerns. The study also showed that the transition to the IFRS have not increased the connection between goodwill intensity and stock market risk which was the theoretical perception. On the contrary, we found a weakened connection between the two variables. It is however also to be highlighted that even though there is no apparent connection on an aggregated level between goodwill intensity and stock market risk, an individual companies could still be subject to an increased risk due to a high level of goodwill intensity.},
  author       = {Svensson, Robin and Ericsson, David},
  keyword      = {Management of enterprises,IFRS,regulation,beta,goodwill,risk,Företagsledning,management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Is goodwill a factor of stock market risk - A study of the Stockholm Stock Exchange},
  year         = {2011},
}