Since the early 1960's the European capital market has witnessed rapid growth as a source of short- and long-term dollar denominated funds to international borrowers and as an alternative investment area to potential lenders. While considerable work has analyzed the determinants of short-term dollar denominated Eurorates (Eurodollar yields), less work has concentrated on the determinants of long-term dollar denominated (Eurobond yields under floating rates and post-capital controls.

This study investigates whether the market-determined systematic risk of the companies that used leasing extensively was affected by ASR 147, the FASB's August, 1977, exposure draft on lessee accounting, and SFAS 13. Three samples of companies were used in the study: (1) companies which engaged in a lot of leasing, (2) companies which did very little leasing, and (3) a random sample of companies. The leasing sample and the non-leasing sample were matched by Standard Industrial Classification (SIC) code. There was no significant change in the systematic risk of the sample companies pre- and post-June, 1973. There was no significant change in the systematic risk of the three groups of companies pre- and post-August, 1975. This leads to the conclusion that the SEC's ASR 147 and the FASB's pronouncement had little effect on the market's assessment of systematic risk.