Abstract:
This thesis examines the association between operating leverage and expected return, operating leverage and systematic risk and also among operating leverage and book-to-market ratio through an empirical approach. Financial leverage, as an interactive term of operating leverage, is also included as a main test variable throughout the research. The sample used in the empirical test is based on 184 textile firms listed on Karachi Stock Exchange with a time window of 5 years (2008-2012).
