Master of Science (MS)
First Committee Member
Number of Pages
The purpose of this study was to investigate the relationship between the key financial variables of casino firms and their common stocks, and to examine the risk features and the diversifiability of casino stocks; The financial and stock return data for the period 1992-1994 in this study were obtained from the CD-ROM database of the University of Nevada, Las Vegas and the Center for Research in Security Prices (CRSP File) of the Graduate School of Business, University of Chicago. The relationship between four financial variables (current ratio, leverage ratio, asset turnover ratio, and profit margin ratio) and the casino beta was tested by using a cross-sectional multiple regression analysis; The study found that asset turnover ratio was negatively correlated with beta (i.e., a firm with high efficiency has a low beta), but current ratio, leverage ratio, and profit margin ratio were not significantly correlated with casino betas. The study also found that 92% of the total risk of casino firms between 1992 and 1994 was due to the unsystematic risk which is determined by firm-specific factors. Therefore, the volatility of casino stocks was primarily explained by each casino's unique factors; The findings of the study suggest that the systematic risk of casino firms is related to the efficient management of casino assets. High efficiency leads to lower systematic risk and hence the value of casino firms may be enhanced.
Analysis; Beta; Casino; Features; Financial; Industry; Relationship; Risk; Variables
University of Nevada, Las Vegas
Kim, Hyunjoon, "Risk features and relationship between financial variables and beta: An analysis of the casino industry" (1996). UNLV Retrospective Theses & Dissertations. 3243.