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Capital structure, business risk, and investor returns for agribusinesses

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  • D. Lynn Forster

    (Department of Agricultural Economics, The Ohio State University, Columbus, OH 43210)

Abstract

The effects of firm capital structure and business risk on investors' rates of return in agribusiness from 1984 to 1993 are investigated. Measures of firm solvency and liquidity and a measure of business risk are used to explain risk adjusted excess rates of return for agribusiness investors. Results confirm the hypothesis that the capital structure and business risk of agribusiness firms are important determinants of returns to common stock owners. © 1996 John Wiley & Sons, Inc.

Suggested Citation

  • D. Lynn Forster, 1996. "Capital structure, business risk, and investor returns for agribusinesses," Agribusiness, John Wiley & Sons, Ltd., vol. 12(5), pages 429-442.
    • Handle: RePEc:wly:agribz:v:12:y:1996:i:5:p:429-442
    DOI: 10.1002/(SICI)1520-6297(199609/10)12:5<429::AID-AGR3>3.0.CO;2-8
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    References listed on IDEAS

    as
    1. Peter J. Barry & C. B. Baker & Luis R. Sanint, 1981. "Farmers' Credit Risks and Liquidity Management," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(2), pages 216-227.
    2. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
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    Cited by:

    1. Neibergs, J. Shannon, 1998. "Macroeconomic Conditions And Agribusiness Profitability: An Analysis Using Pooled Data," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 1(1), pages 1-15.
    2. Ernesto Lopez‐Valeiras & Jacobo Gomez‐Conde & Teresa Fernandez‐Rodriguez, 2016. "Firm Size and Financial Performance: Intermediate Effects of Indebtedness," Agribusiness, John Wiley & Sons, Ltd., vol. 32(4), pages 454-465, November.
    3. Jaworski, Jacek & Czerwonka, Leszek & Mądra-Sawicka, Magdalena, 2019. "Determinants of Capital Structure: Evidence from Polish Food Manufacturing Industry," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(1), March.
    4. McKee, Gregory & Larsen, Ryan, 2012. "The Effects of Uncertainty and Capital Source on Cooperative Firm Leverage," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 40(2), pages 1-18.

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