Systematic risk testing by means of Brimble-Hodgson accounting model in the construction area

The goal of this article is to point at the possibilities of estimating the beta coefficient by means of accounting variables. Its advantage is that it can be applied for the companies which shares are not traded at the stock exchange, or for newly established companies (e.g. start-ups) with no history of their activities and with very limited possibilities of risk diversification. We are of the opinion that these data can be considered as one of the most appropriate means of estimating the overall risk of the particular company. Beta coefficient estimate is not based on the market information, but on the accounting data of the company being analysed. By testing of the Brimble-Hodgson model on the constructing area we have identified significant variables with serious influence over the systematic risk