Financial Risk Management via a Two Factors Model on the Risk Level of Vietnam Electric Power Industry during and after the Global Crisis

This research paper aims to find out the risk level of listed electric power firms increasing or
decreasing during the crisis 2007-2011. The significance of this paper is to provide these firms with
financing information based on risk level. Using a two (2) factors model, this research paper analyzes
the impacts of both financial leverage and the size of firms’ competitors in the electric power industry
on the market risk level of 20 listed companies in this category.
This paper founds out that the risk dispersion can be reduced to 0,039 (asset beta var) if leverage is
up to 30%.
Beside, the empirical research findings show us that the market risk level measured by asset beta
mean is also reduced to 0,131 when financial leverage increases 30%.
Last but not least, this paper illustrates calculated results that might give proper recommendations to
relevant governments and institutions in re-evaluating their policies after the financial crisis 2007-
2011.