股票价格的百分比变化等于总股本的百分比变化(给定N个固定值)。这等于公司价值变化的百分比乘以1加上债务/权益比率。公司杠杆率越高(D/E越高)，股票相对于整个公司的波动性就越大。如下式(Fan et al, 2007)所示。
L =(1 +德)
V = E + D =公司总价值
E= NS =与当前市场价格为S和D的股票公司相关的N股已发行股票的总流通市值，按债务价值计算。
As considered, any company’s market value will be driven by stock value of the company at the current price that means E=V
The percentage change in the stock price can be calculated as given below for any company:
The percentage change in the stock price is equal to the percentage change in total equity (given N fixed). This equals the percentage change in company value times one plus the debt / equity ratio. The more levered the company is (high D/E), and the more volatile the stock will be relative to the total company. That is expressed in below equation (Fan et al, 2007).
S =volatility of the return of the stock
E =volatility of the total equity
V =volatility of the company
V = E + D = Total value of company
E= NS =Total current market value of the N outstanding shares related to the stocks company which has the current price in the market as S and D as per the value of debt.
Let us consider now that there is random valuation change in company = V
Therefore, change in company’s market valuation as percentage = VV
In order to do the evaluation of the determinants and its value which may be there at the aggregate level, it is important to do the derivation of the equilibrium dynamics which may be there in the market portfolio. In the model which is given by us, the value of the market portfolio gives the overall representation of the firm which leads to the payment of the aggregate consumption stream (t) to the overall outside claimaint for the same. In order to explore the overall value of leverage it is important to understand the time varying effects of risk premium on the overall aggregate volatility dynamics. For the same, the payouts of the firm are split into two different financial claims.