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on Corporate Finance |
| By: | Fernandez, Pablo (IESE Business School) |
| Abstract: | La valoración de una empresa es un ejercicio de sentido común que requiere unos pocos conocimientos técnicos y mejora con la experiencia. Ambos (sentido común y conocimientos técnicos) son necesarios para no perder de vista: ¿qué se está haciendo?, ¿por qué se está haciendo la valoración de determinada manera? y ¿para qué y para quién se está haciendo la valoración? Casi todos los errores en valoración se deben a no contestar adecuadamente a alguna de estas preguntas, esto es, a falta de conocimientos o a falta de sentido común (o a la falta de ambos). Los métodos conceptualmente "correctos" para valorar empresas con expectativas de continuidad son los basados en el descuento de flujos de fondos: consideran a la empresa como un ente generador de flujos de fondos y, por ello, sus acciones y su deuda son valorables como otros activos financieros. Otro método que tiene lógica y consistencia es el valor de liquidación, cuando se prevé liquidar la empresa. Lógicamente, el valor de las acciones será el mayor entre el valor de liquidación y el valor por descuento de flujos. Comentamos brevemente otros métodos porque -aunque son conceptualmente "incorrectos" y carecen de sentido en la mayoría de los casos- se siguen utilizando con frecuencia. En ciertos casos, los múltiplos pueden utilizarse como aproximación (si se requiere una valoración rápida o si los cash flows son muy inciertos) o como contraste del valor obtenido por descuento de flujos. |
| Keywords: | métodos valoración; descuento flujos; activo neto real; valor liquidación: |
| JEL: | G12 G31 M21 |
| Date: | 2008–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0771&r=cfn |
| By: | Groh, Alexander P. (IESE Business School) |
| Abstract: | Why is there such a strong private equity market in the United States or the United Kingdom? Why is activity relatively low in several other economically important countries? And why is it zero or close to zero in many emerging regions? Spatial variations of private equity activity result from numerous factors. In this paper I summarize the literature contributions on the determinants of national private equity activity and comment on the consequences for the development of the private equity asset class in emerging markets. |
| Keywords: | Private Equity; Emerging Markets; |
| JEL: | G24 O16 R12 |
| Date: | 2009–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0779&r=cfn |
| By: | Groh, Alexander P. (IESE Business School); Gottschalg, Oliver (HEC School of Management) |
| Abstract: | This paper addresses the problem of accurately determining buyout opportunity cost of capital for performance analyses. It draws on a unique and proprietary set of data on 133 United States buyouts between 1984 and 2004. For each buyout, we determine a public market equivalent that matches the buyout in timing and systematic risk. We show that under realistic mimicking conditions, the average opportunity cost of capital is below the commonly used benchmark S&P 500. The surprising result has a simple explanation: ex post, many of the transactions mimicking the buyouts would have defaulted in the public market. Only under relaxed assumptions, is the average opportunity cost of capital close to the average index return. Our sensitivity analyses highlight the need for a comprehensive risk adjustment that considers both operating risk and leverage risk for an accurate assessment of buyout performance. This finding is particularly important as existing literature on this topic tends to rely on benchmarks without a proper risk adjustment. |
| Keywords: | Private Equity; Risk-Adjusted Performance; Buyout; Benchmarking Alternative Assets; |
| JEL: | G11 G24 G32 |
| Date: | 2009–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0780&r=cfn |
| By: | Christopher F. Baum; Dorothea Schäfer; Oleksandr Talavera |
| Abstract: | We estimate firms' cash flow sensitivity of cash to empirically test how the financial system's structure and activity level influence their financial constraints. For this purpose we merge Almeida, Campello and Weisbach (2004), a pathbreaking new design for evaluating a firm's financial constraints, with Levine (2002), who paved the way for comparative analysis of financial systems around the world. We conjecture that a country's financial system, both in terms of its structure and its level of development, should influence the cash flow sensitivity of cash of constrained firms but leave unconstrained firms unaffected. We test our hypothesis with a large international sample of 80,000 firm-years from 1989 to 2006. Our findings reveal that both the structure of the financial system and its level of development matter. Bank-based financial systems provide constrained firms with easier access to external financing. |
| Keywords: | financial constraints, financial system, cash flow sensitivity of cash |
| JEL: | G32 G30 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp863&r=cfn |
| By: | Alexander Muravyev |
| Abstract: | This paper uses a quasi-experimental framework provided by recent changes in Russian corporate law to study the effect of investor protection on the value of shares. The legal change analyzed involves the empowerment of preferred (non-voting) shareholders to veto unfavorable changes in their class rights. Based on a novel hand-collected dataset of dual class stock companies in Russia and using the difference-in-difference estimator, the study finds a statistically and economically significant effect of improved protection of preferred shareholders on the value of their shares. The result is robust to several changes in the empirical specification. |
| Keywords: | Investor protection, company law, dual class stock, class rights, Russia |
| JEL: | G30 G38 K22 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp865&r=cfn |
| By: | Takashi Shibata (Associate Professor, Tokyo metropolitan University (E-mail: tshibata@tmu.ac.jp)); Tetsuya Yamada (Associate Director, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: tetsuya.yamada@boj.or.jp)) |
| Abstract: | We develop a dynamic credit risk model for the case that banks compete to collect their loans from a firm falling in danger of bankruptcy. We apply a game-theoretic real options approach to investigate bankfs optimal strategies. Our model reveals that the bank with the larger loan amount, namely the main bank, provides an additional loan to support the deteriorating firm when the other bank collects its loan. This suggests that there exists rational forbearance lending by the main bank. Comparative statics show that as the liquidation value is lower, the optimal exit timing for the non-main bank comes at an earlier stage of business downturn and the optimal liquidation timing by the main bank is delayed further. As the interest rate of the loan is lower, the optimal exit timing for the non-main bank comes earlier. These analyses are consistent with the forbearance lending and exposure concentration of main banks observed in Japan. |
| Keywords: | Credit risk, Relationship lending, Real option, Game theory, Concentration risk |
| JEL: | G21 G32 G33 D81 D92 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:09-e-07&r=cfn |