Is goodwill a factor of stock market risk - A study of the Stockholm Stock Exchange

The purpose of this study was to examine the connection between goodwill intensity and stock market risk and how the transition to the IFRS has effected this connection. In the end of 2010 several financial analysts expressed their concerns about the increasing goodwill intensity in listed Swedish corporations. However, in this study examining the connection between goodwill intensity and stock market risk, we found no basis for these concerns. The study also showed that the transition to the IFRS have not increased the connection between goodwill intensity and stock market risk which was the theoretical perception. On the contrary, we found a weakened connection between the two variables. It is however also to be highlighted that even though there is no apparent connection on an aggregated level between goodwill intensity and stock market risk, an individual companies could still be subject to an increased risk due to a high level of goodwill intensity.