The accounting Beta as an alternative to the market Beta for agricultural companies on the Lima stock exchange

Abstract

The objective of this study was to determine whether accounting Beta could be an effective alternative to market Beta for measuring systematic risk in agricultural companies listed on the Lima Stock Exchange (BVL) during the period 2017-2023. To achieve this, a sample of nine agricultural companies was selected, excluding those that did not have their complete Financial Statements published because they were not listed during the selected period. Market Beta was calculated using the average stock prices, and accounting Beta was derived from profitability indicators such as ROA, ROE, and EBIT. Financial information was gathered from the BVL portal and the Superintendency of the Securities Market. The analysis was performed through linear regression calculations using Excel software to evaluate the relationship between market and accounting Betas. The results showed that, although there is a positive relationship between both Betas, it is weak, suggesting that accounting Beta has limited predictive ability to measure systematic risk in this specific sector and in small stock exchanges that do not have a high trading volume. It is recommended to use accounting Beta with caution and in combination with other approaches for a more comprehensive risk assessment.