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Does Cost Stickiness Affect Financial Risk?

  • Kristina Reimer
Chapter
Part of the Quantitatives Controlling book series (QC)

Abstract

As discussed in Chapter  4, asymmetric cost behavior can be interpreted as an investment in a risky project. Thus, cost stickiness can be thought as part of a firm’s overall business risk defined as “the risk associated with the level and stability of operating cash flow”. The business risk of a firm is exposed to market risk, i.e., a potential loss from unfavorable market movements, usually estimated as risk from a stock market index such as the S&P 500 in the US market or EURO STOXX 50 in the European market.

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Copyright information

© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Universität zu KölnKölnGermany

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